Mid-Day Gold & Silver Market Report – 6/18/2014

Peter LaTona

6/18/2014 12:04:00 PM

MARKETS ON HOLD AWAITING FED CHAIR YELLEN’S PRESS CONFERENCE

Gold, Silver and the equity markets are on hold awaiting news from the Fed FOMC meeting that’s scheduled to take place at 2 P.M. (ET) today. Here are five questions investors are looking to hear answers for:  Are there any new worries about inflation? U.S. consumer prices jumped up in May. Is there any less optimism over the recovery? Economists are lowering GDP expectations. How much slack is in the economy especially concerning the labor market? Which way is the exit? Is the Fed itself a headwind? Are the high capital standards for banks actually slowing the recovery? Let’s see what answers may come.

Oil prices continue to react to news coming out of Iraq and Ukraine. At one point, will oil prices pose a real threat to a global economic recovery? The rule of thumb most economists employ is that for every $10 increase in the price of a barrel of oil, global growth will go down by 0.2 percent. This might not sound like much, but the latest estimates from the World Bank for 2014 global growth is only 2.8 percent. “There is no doubt that, beyond a certain point, higher prices become a major constraint on global economic activity, particularly if the price reflects supply problems rather than buoyant demand,” Julian Jessop, chief global economist at Capital Economics Ltd., said. Capital is flagging $120 per barrel as the danger point. “What’s more, a strong and sustained recovery seems unlikely as long as oil is above $100,” Jessop said.

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

• Gold, $1,275.20, Up $1.20.
• Silver, $19.85, Up $0.06.
• Platinum, $1,452.30, Up $7.10.
• Palladium, $822.10, Up $5.40.

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