Morning Gold & Silver Market Report – 3/6/2013

Nicholas Wilsey

3/6/2013 8:32:00 AM

GOLD MOVES UP ON PHYSICAL DEMAND, EASING TALK

Gold has started the day moving upwards based on physical buying from Asia and from talk of stimulus from around the globe. Central banks in Europe and Japan are meeting this week and all signs point to their continuance of aggressive monetary easing programs. These easing programs have given support to the Precious Metals market, and it is believed by many economists that they will continue to do so. In the United States, there is another storyline with a more positive economic tone. “The U.S. government is beginning to return to long-term fiscal sustainability and this is something which potentially undermines the rationale for holding Gold,” said Nic Brown, head of commodity research at Natixis. Gold has been caught between global economic struggles and U.S. improvement, which has left the yellow metal relatively flat.

In Europe, the headlines remain centered on the failed election in Italy and how it will affect the European Union moving forward. This week the leaders of the E.U. will meet for the first time since the election, and investors are keeping a close eye on the proceedings. “Investors are cautious about the euro before the ECB meeting tomorrow, and there is always the risk that eurozone GDP could be revised downwards today and feed into fears that [ECB President Mario Draghi] may strike a dovish stance,” said Jeremy Stretch, head of currency strategy at CIBC World Markets. If the leaders at the meeting give a downgraded outlook on the union’s economy, it could give way to more monetary easing to assist the struggling region.

At 9:00 am (EDT), the APMEX precious metals spot prices were:

• Gold, $1578.90, Up $2.00.
• Silver, $29.82, Up $0.17.
• Platinum, $1594.40, Up $6.70.
• Palladium, $739.40, Up $5.80.

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