Morning Gold & Silver Market Report – 12/9/2014

Brandi Brundidge

12/9/2014 10:23:00 AM

GOLD CLIMBS ON PESSIMISTIC FED NEWS; SHILLER EXPLAINS OVERVALUATION OF EQUITIES

This morning, Gold reached its highest point since late October thanks to Atlanta Federal Reserve President Dennis Lockhart’s comments yesterday that he’s in no hurry to raise interest rates. The news pulled the U.S. dollar back to its largest one-day drop since April versus the Japanese yen. "It's a combination of dollar weakness and a breakthrough of the 1,200 and 1,208 levels in quick succession," Mitsubishi analyst Jonathan Butler said. "The latter is the 61.8 percent retracement of (retreat from) the October high to the November low."  Further movement in the yellow metal will depend on how the dollar performs and when the Fed decides to increase interest rates. 

Recently the U.S. stock market has been performing well with support from a stronger dollar and healthier economy. Today, Case-Shiller Index founder Robert Shiller shared his viewpoint on the market and how investors’ confidence is affecting the value of equities. According to Shiller, the market is currently overvalued with a financial crisis looming in the near future. Shiller measures the markets true value with the Cyclically Adjusted Price-Earnings (CAPE) ratio, which is linked to the precrisis peak in 2007 and reflects that stocks are currently overvalued. Shiller stated he would not advise one to over-invest in the market, but he would not exit it either. 

At 11:25 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,236.50 Up $38.60
• Silver, $17.25 Up $0.92
• Platinum, $1,253.30 Up $21.90
• Palladium, $807.30 Up $9.50

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