Morning Gold & Silver Market Report – 5/2/2013

Nicholas Wilsey

5/2/2013 8:15:00 AM

GOLD GAINS AS EUROPE CUTS RATES

The European Central Bank (ECB) cut its main interest rate down to 0.5 percent. This highly anticipated move has had little effect on the European stock market and the value of the euro; however, the Gold market is moving upward on the news. “The ECB's decision to cut interest rates to 0.5 percent had looked ever more inevitable as latest data and survey evidence pointed to ongoing and widespread economic weakness across the eurozone as well as below target and receding inflation,” Howard Archer of IHS Global Insight said after the decision. 

Announcements from the central banks of the U.S. and the eurozone caused the Gold price to show improvement, but not to the level some would believe is warranted. “The logic was that the more [quantitative easing] was done by central banks the more inflationary pressure we would have, but there's no sign of that and Gold is suffering,” Societe Generale analyst Robin Bhar said. The next key report investors are eyeing is the U.S. jobs report on Friday. If the report is disappointing, it will support the idea behind the long-term use of monetary easing in the U.S. by the Federal Reserve. 

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

• Gold, $1466.20, Up $17.50.
• Silver, $24.01, Up $0.58.
• Platinum, $1491.10, Up $20.10.
• Palladium, $692.00, Up $5.30.

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