Daily Gold & Silver Market Report – 1/21/2015

Brandi Brundidge

1/21/2015 10:04:53 AM

GOLD CONTINUES CLIMB; UPCOMING POLICY MEETINGS FOR ECB, FEDERAL RESERVE

Gold crossed an important threshold this morning, climbing over $1,300 an ounce for the first time since August. The recent jump in Precious Metals prices comes from investors’ concern over the global economy.  The market anticipates the European Central Bank (ECB) will announce a new round of quantitative easing (QE) to boost their economy at Thursday’s ECB policy meeting.  “We have seen this month the largest SPDR inflows since August 2012 when the [Federal Reserve] was revving up to do QE3, so ECB QE is having a similar impact,” Macquarie analyst Matthew Turner said.  The U.S. dollar dropped 0.4 percent against major currencies as the Bank of Japan decided not to further its monetary policy with more easing, as was expected.  The spotlight is on Gold right now as financial uncertainty around the world has investors flocking to the safe haven asset.

The next Federal Reserve policy meeting is set for January 27-28 and it is projected they will repeat previous moves with no indication of increasing interest rates.  “I think it is important to get started and to start normalizing policy,” St. Louis Fed President James Bullard said. “Even once we start to normalize, interest rates would be extraordinarily low.”  The market is unsure how the Fed will handle a hike in interest rates with growing concern over lower oil prices, financial troubles abroad and slower consumer price inflation.  The Fed set short-term rates near zero in December 2008 following the U.S. economy’s financial collapse. 

At 11:00 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,292.00 Down $4.20
• Silver, $18.18 Up $0.17
• Platinum, $1,276.40 Down $10.20
• Palladium, $774.80 Down $5.40

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