Mid-Day Gold & Silver Market Report – 5/23/2014

Peter LaTona

5/23/2014 12:16:00 PM

GOLD, SILVER REMAIN IN A TIGHT TRADING RANGE

Gold and Silver are trading slightly lower, while the S&P 500 tops its record close. The metals have been trading in a tight range for some time now and, according to U.S. Global Investors CEO and CIO Frank Holmes, Gold needs to see a rising GDP and a negative real return. Currently, there is a negative real return, but interest rates are so low that the negative return has not driven investors out of treasuries. However, as the GDP rises, inflation will rise and so will the negative returns. In this scenario, there will be more movement from the U.S. dollar to Gold. Holmes also discussed the two big drivers of Gold demand: the Love Trade and the Fear Trade. The Love Trade is cultural and seen widely in the east, especially India and China. The Fear Trade is a portfolio diversification strategy.

Former U.S. Treasury Secretary Timothy Geithner’s new memoir is a good reminder of what happened to investors the last time markets were this calm. “I got to see how much power the belief in the ‘Great Moderation’ had over smart people, and to witness its expression in the credit boom,” writes Geithner of his time running the Federal Reserve Bank of New York prior to the 2008 financial crisis. The result was a series of financial fires that seriously threatened the global economy. “When you look at financial markets to me a lot of it looks like 2007 all over again,” said William White, a former head of the Bank for International Settlements. White, who now advises the Organization for Economic Cooperation and Development, also said, “There are more of the same policies which brought you the problem in the first place.”

At 1:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,293.60, Down $3,50.
• Silver, $19.48, Down $0.10.
• Platinum, $1,473.40, Down $20.70.
• Palladium, $829.00, Down $8.50.

APMEX’s Account Managers now have extended hours Mondays through Thursdays and are here to serve you until 8 p.m. (EDT)! Or call us Fridays until 6 p.m. (EDT)! If you have any questions about investing in Precious Metals or simply would prefer to place your order by telephone, we are here to help.