Morning Gold & Silver Market Report – 1/7/2013

Geoffrey Varner

1/7/2013 8:04:00 AM

GOLD KNOCKED DOWN, REBOUNDS SLIGHTLY; STOCKS AWAIT Q4 EARNINGS

The Gold price rebounded in overnight trading after falling Friday when the Federal Reserve indicated that the current QE program might come to an end this year. Quantitative easing (QE) weakens the U.S. dollar and historically supports prices on a range of assets, including Gold. Analysts at Commerzbank wrote in a note to clients, “We view Gold primarily as a monetary asset or as insurance.” Gold tends to have an inverse correlation to the U.S. dollar, acting as a safe haven investment against a more risky currency.

U.S. stock futures changed little in over-night trading after reaching a five year high and starting the new year out strong. Guy Foster, a fund analyst at Brewin Dolphin Securities Ltd. in London, said, “It’s difficult to see stocks making a great deal of headway given that they’re approaching overbought conditions.” He went on to say, “Nothing has really been clarified on the fiscal-cliff debate. Aside from some really positive earnings surprises, it’s likely that stocks are going to consolidate at these levels.” However, keep your eyes on the markets as we enter the earnings season. Member companies of the Dow average will release fourth-quarter results beginning tomorrow.

At 9 a.m. (EST), the APMEX Precious Metals spot prices were:

• Gold, $1,647.60, Down $3.20.
• Silver, $29.93, Down $0.05.
• Platinum, $1,551.80, Down $5.70.
• Palladium, $678.60, Down $10.90.

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