Closing Gold & Silver Market Report – 10/27/2014

Peter LaTona

10/27/2014 2:46:00 PM

GOLD DROPS AS ETP ASSETS DECLINE TO FIVE-YEAR LOW

Holdings in exchange traded products (ETP) backed by Gold fell to their lowest level in five years. The metal’s 30-day historical volatility has climbed this month, shaking many investors out of the market. Investors continue to try and predict when the U.S. Federal Reserve will raise interest rates, which is considered a negative for metal prices. Fed policy makers begin their two-day Federal Open Market Committee meeting Tuesday. “The market is in a wait-and-watch mode ahead of the Fed meeting,” TD Securities head of commodity strategy Bart Melek said in a telephone interview. “The Fed’s guidance on interest rates will determine the future price direction.”

Metals and U.S stocks have been relatively flat today, as stocks follow their strongest performance of the year last week. “We have a tug of war between strong fundamentals in the U.S. versus the global macro,” at Wunderlich Securities chief market strategist Art Hogan said. A report was released showing German business sentiment declined for a sixth consecutive month, increasing worries about the European economy. “If we have one clear economic concern, it's the deteriorating economic situation in Europe,” Key Private Bank chief investment strategist Bruce McCain said.

At 5:00 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,230.40 Down $3.40
• Silver, $17.20 Down $0.04
• Platinum, $1,258.00 Up $5.10
• Palladium, $786.50 Up $4.70

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