Mid-Day Gold & Silver Market Report – 8/18/2014

Peter LaTona

8/18/2014 12:05:00 PM

STOCKS BOOM; GOLD, SILVER COMPLACENT

Global equity markets are up across the board and the U.S. markets are no exception. The Nasdaq Composite rose to a 13 year high while oil is at its lowest in almost a year. Stories coming out of Ukraine and the Middle East indicate an easing of geopolitical tensions and the markets are reacting favorably. “The largest of the drivers is really a reversal of our concerns on Friday, the alleged news coming out of Ukraine, as those stories are a bit disputed here. And it appears the Kurds are making progress in taking back the dam in Mosul, so the Iraq story too is playing a role here, and that's why we're seeing crude off and stocks up,” Wunderlich Securities chief market strategist Art Hogan said.

Last week, the World Gold Council released its Gold Demand Trends report for the second quarter of 2014 showing that Gold demand has returned to its long term trend, coming off highs achieved in 2013. Marcus Grubb, World Gold Council managing director of investment strategy, commented, “In the context of an exceptional year last year where we saw record consumer buying and investor sell-offs, this quarter's demand continues to demonstrate a return to long-term trends, illustrating the uniquely balanced nature of the Gold market. Jewelry consumers continued to digest the exceptional purchases of 2013 and investors also rebalanced, pulling back from the extremes we saw last year. Overall the Gold market is stabilizing following the extraordinary conditions we saw in 2013.” Some key report findings include:

· Jewelry continues to represent more than 50 percent of the world’s Gold demand

· Central banks have increased their Gold purchases by 28 percent

· Exchange traded fund outflows are only one tenth of second quarter 2013

· Recycling is at its lowest since 2007

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

• Gold, $1,300.40 Down $6.80
• Silver, $19.67 Up $0.11
• Platinum, $1,447.50 Down $9.70
• Palladium, $896.00 Up $0.50

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