Mid-Day Gold & Silver Market Report – 8/12/2014

Peter LaTona

8/12/2014 12:00:52 PM

GOLD GOING UP, STOCKS HEADING DOWN

After a period of varying risk in the markets, today Gold is on the upswing as Ukraine is not allowing a convoy of 280 Russian trucks, claiming to carry humanitarian aid, across its border. Ukrainian officials would prefer Russia follow international rules, which would require the convoy be led by the Red Cross. However, Ukraine is not the only geopolitical hotspot. “There’s multiple hotspots in the world that could easily spiral out of control to something much greater,” Long Leaf Trading Group chief market strategist Tim Evans said in a telephone interview. “You’ll find that investors will normally flock to safe-haven markets, like Gold, in case something really does develop much greater than what we’re seeing currently.”

The theory of secular stagnation, or a long period of slow growth, is a term that Federal Reserve watchers should expect to hear more in the coming months. First developed by Alvin Hansen during the Great Depression, there is concern that secular stagnation could cause enough diminishing investment opportunities to stunt economic growth and prevent full employment. Minneapolis Fed President Narayana Kocherlakota plans to hold a symposium on the subject this November. "I think there's a lot of concern about how long this will last, and I think that's certainly high on the agenda right now. At least people are entertaining that possibility now that it could drag on for longer," said Brown University associate professor of economics Gauti Eggertsson, who, along with fellow Brown economist Neil Mehrotra, authored "A Model of Secular Stagnation," which provides an in-depth explanation of how a long period of low growth could come about.

At 1:00 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,315.50 Up $5.00
• Silver, $20.02 Down $0.10
• Platinum, $1,472.00 Up $0.40
• Palladium, $879.10 Up $3.40

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