Mid-Day Gold & Silver Market Report – 1/3/2013

Ted Prince

1/3/2013 12:02:00 PM

GOLD, STOCK MARKETS SETTLE FOLLOWING WEDNESDAY’S STRONG ADVANCE

Gold stumbled from its two-week high today as the market rallied following a solution to the tax portion of the fiscal cliff. With U.S. fiscal negotiations at least temporarily out of the spotlight, alternate economic factors will come in to focus. Since the economic downturn in the fall of 2008, the Gold price has been most significantly impacted by the Federal Reserve’s strategy of quantitative easing. The exorbitant amount of currency that is being printed and subsequently injected into the monetary system has economists concerned over the possibility of inflation in the coming years. Bill Gross, bond chief and manager of the Total Return Fund at Pimco, warns of “inflationary dragons” that will come as a result of the Fed’s current spending strategy. Gross stated, “The future price tag of printing six trillion dollars’ worth of checks comes in the form of inflation and devaluation of currencies either relative to each other, or to commodities in less limitless supply such as oil or Gold. … When central banks enter the cave of quantitative easing and ‘essentially costless’ electronic printing of money, there may be dragons.”

Stocks have stalled today following yesterday’s largest jump in more than a year. Now that anxiety over the U.S. budget deficit is temporarily on the backburner, investors have switched focus. Today’s jobs data for the month of December boasts gains, but financial analysts are hesitant to read too much into the report. “The claims data are not always reliable labor market indicators around the holiday season because of issues seasonally adjusting the data, but it is still a somewhat encouraging sign to see the trend in the data remain relatively low," Daniel Silver, an economist at JPMorgan in New York, said. As the U.S. government continues stimulus measures until the nation whittles unemployment down to 6.5 percent, many investors are looking to Gold and other Precious Metals as a long-term store of wealth.

At 1 p.m. (EST), the APMEX Precious Metals spot prices were:

• Gold, $1,679.50, Down $11.30.
• Silver, $30.91, Down $0.13.
• Platinum, $1,578.00, Up $11.00.
• Palladium, $698.40, Down $10.60.

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