Closing Gold & Silver Market Report – 5/1/2013

Ted Prince

5/1/2013 4:02:00 PM

QE REMAINS UNCHANGED AS PHYSICAL DEMAND STILL STRONG

The Gold price rebounded slightly from morning lows as the Federal Reserve expressed no intention of altering its ultra loose monetary policy. Though the Fed announced that the U.S. economy is experiencing modest expansion they did state “the Committee is prepared to increase or reduce the pace of its purchases to maintain appropriate policy accommodation as the outlook for the labor market or inflation changes.” In the short-term, it seems the Fed’s massive bond-purchase program is not exacerbating the long touted inflationary debacle that was such a bullish marketing factor for Gold in recent years. However, long-term Precious Metals investors feeling anxiety surrounding Gold’s recent price correction were comforted as current projections for future inflation remain unchanged. Traditionally, sustained dollar devaluation and inflation have positively impacted Precious Metals prices. 

The historic two session price drop that saw Gold fall more than $200 has done little to curb the appetite for physical bullion investors. “It's been primarily the financial component that has been selling. I don't think that we have seen a lot of small holders changing their view on Gold,” Nicholas Johnson, a portfolio manager at PIMCO, said. The U.S. Mint has reported demand for Gold American Eagles to be at its highest level since December 2009. With the mentality of electronic and bullion investors remaining in sharp contrast, many experts expect the Asian market and central bank demand for physical Gold to offset the fear-based selling that is taking place among Gold exchange traded funds.

At 4:00 pm (EDT), the APMEX precious metals spot prices were:

• Gold, $1459.00, Down $15.60.
• Silver, $23.69, Down $0.58.
• Platinum, $1478.60, Down $30.10.
• Palladium, $690.30, Down $9.60.

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