Mid-Day Gold & Silver Market Report – 5/8/2013

Nicholas Wilsey

5/8/2013 12:01:00 PM

GOLD PRICE GAINS ON STRONG DEMAND

The Gold price is moving up today based on very strong sales numbers out of China. Last month, Gold imports into China more than doubled, setting an all-time high. One of the most impressive things to note is that all of this happened before Gold’s price dropped in April. “This is quite out of expectation as all these imports were done before the market slump in April. Judging from the explosive growth of trading volume on the Shanghai Gold Exchange in the second half of April, and anecdotes that many jewelry shops are sold out throughout the country, imports might be even more substantial in April,” said Qu Mingyu, a trader at Bank of China, one of the country’s three largest bullion banks.

The United States Federal Reserve’s latest monetary policy has been going strong for months now and some are starting to call for even more. "They say that they're going to set monetary policy in a way that ensures future inflation will be 2.0 percent.  Right now, they expect it to be lower than that, and unemployment to be unconscionably high, so the Fed's own framework says that they need to take more stimulative action,” said Justin Wolfers, an economics professor at the University of Michigan's Gerald Ford School of Public Policy.  Further easing could put added pressure on the U.S. dollar, which has historically given support to Gold.

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

• Gold, $1469.70, Up $18.40.
• Silver, $23.89, Down $0.01.
• Platinum, $1504.50, Up $21.80.
• Palladium, $699.80, Up $17.20.

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