Mid-Day Gold & Silver Market Report – 9/26/14

Brandi Brundidge

9/26/2014 12:00:00 PM

U.S. GDP RISES, GOLD REACTS

The latest U.S. Commerce Department data shows gross domestic product increased in the second quarter at a revised 4.6 percent annualized rate. This is the fastest growing rate since the fourth quarter of 2011, as businesses focused on investments and consumer spending increased.  “We definitely see momentum” in the U.S. economy, said Brittany Baumann, an economist at Credit Agricole CIB in New York, which correctly forecast GDP. “Consumer spending should benefit from strengthening labor conditions and improved financial conditions.” The Federal Reserve has made several attempts to direct the market’s attention toward optimistic U.S. data to provide explanation as to why they believe their bond buying program should end and interest rates should increase. “The labor market has yet to fully recover,” Federal Reserve Chair Janet Yellen said at a press conference after a monetary policy meeting concluded Sept. 17. “There are still too many people who want jobs but can’t find them.”

Gold declined into the afternoon on positive U.S. economic data.  The yellow metal has been pressured by several factors this year such as the Fed announcing their bond buying program would end and interest rates would increase, a stronger U.S. dollar and an increase in U.S. economic confidence.  “A further rise in the value of the dollar and upward adjustment in expectations about the path of Fed interest-rate hikes in 2015 will, in our view, result in investor-position liquidation triggering more price weakness” for Gold, Georgette Boele, a Precious Metals analyst at ABN Amro Group NV in Amsterdam, said in a report.

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

• Gold, $1,216.80 Down $6.60
• Silver, $17.61 Up $0.10
• Platinum, $1,304.50 Down $11.70
• Palladium, $784.00 Down $19.10

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