Mid-Day Gold & Silver Market Report – 4/23/2013

Brandi Brundidge

4/23/2013 11:56:00 AM

IS GOLD UNDERVALUED COMPARED TO FIAT MONEY?

Gold’s price movement over the past few weeks has the market questioning whether the bull run is over.  Compared to fiat money, the yellow metal continues to be undervalued, according to Hinde Capital CEO Ben Davies, who believes Gold has held its ground throughout history and is currently being pressured by paper money.  Author Detlev Schlichter said, "After 40 years of relentless paper money expansion and in particular 25 years of Fed led global bubble finance, the dislocations in the global financial system are so massive that nobody in power dares to turn off the monetary spigot and allow market forces to do their work, that is to price credit and to price risk according to the available pool of real savings and the potential for real income generation rather than according to the wishes of our master monetary planners."

The European Central Bank’s (ECB) May 2 meeting has the market anticipating a cut in interest rates due to dropping inflation and the gloomy growth outlook.  "If you ask me if the ECB should cut rates, I would say no, because it has a very easy monetary policy with ample liquidity supply and also emergency liquidity assistance," Goethe University professor Volker Wieland told CNBC.  Europe is currently focusing on many economic factors, such as key countries experiencing debt issues, a German election quickly approaching and a decline for Germany’s growth position for this year, that need to be corrected soon. 

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

• Gold, $1,415.20, Down $8.50.
• Silver, $22.97, Down $0.46.
• Platinum, $1,421.20, Down $16.60.
• Palladium, $674.30, Down $8.70.

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