Closing Gold & Silver Market Report –8/20/2014

Ted Prince

8/20/2014 5:32:00 PM

FED MINUTES INDICATE RATE HIKE COULD BE SOONER THAN EXPECTED

The Gold price fell to a two-week low as investors speculate an interest rate hike may come sooner than expected.  After the release of the minutes from the Federal Reserve’s July policy meeting, Gold came under pressure as non-interest earning assets like Precious Metals reacted negatively to the anticipation of a rate increase.  Continued improvements in the domestic economy are adding fuel to the argument that the Fed should end its stimulus program and begin raising interest rates. “The hawkish voices within the Fed have become louder,” Jerry Webman, chief economist at OppenheimerFunds Inc., said. “While the economic numbers are not very strong, they are definitely showing some strength.”

The S&P 500 ended the day within two points of its all-time high.  Though the release of today’s Fed policy minutes indicated concern over unsteady improvement in the labor market, many economists are beginning to believe the strength of the U.S. economy has developed to a level that quantitative easing should come to an end. “Investors are seeing that it’ll take time to hit those inflation and unemployment levels that they’re looking for,” Stephen Carl, principal and head equity trader at Williams Capital Group LP, said. “It’s imminent that tapering is going to end, so they’re favoring the strong economy.”

At 6:30 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,292.90 Down $3.20
• Silver, $19.52 Down $0.02
• Platinum, $1,430.20  Up $1.00
• Palladium, $868.00 Down $1.40

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