Morning Gold & Silver Market Report – 6/28/2013

TAPERING AS EARLY AS SEPTEMBER GOLD MINES CLOSE

The Gold price fell, and stock markets reversed course into the negative after comments from a Federal Reserve official.  Fed Gov. Jeremy Stein suggested that the central bank could begin tapering as early as September.  “The best approach is for the [Fed] to be clear  that in making a decision in, say, September, it will give primary weight to the large stock of news that has accumulated since the inception of the program and will not be unduly influenced by whatever data releases arrive in the few weeks before the meeting,” Stein said.

The Gold price is hovering around a very important level with regards to production cost.    Reports have surfaced that many Gold mines have closed  because it is simply too expensive to mine the metal compared to the current prices.  Andrew Su of Compass Global Markets said, “This fall in the price of Gold is not truly based on supply and demand - It's based on expectations of what the Federal Reserve is doing.  I think that somewhere along the line the Gold prices will simply start rising, because production will reduce supply significantly.”

At 9 a.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,195.50, Down $18.10.
• Silver, $18.63, Down $0.02.

Closing Gold & Silver Market Report – 6/27/2013

HIGH EXPECTATIONS FOR GOLD FED PRESIDENT BELIEVES QE WILL CONTINUE

As Gold drops, James Rickards, managing director at Tangent Capital, remains bullish on the yellow metal with an optimistic view for the near future. Richards believes the Federal Reserve will do the opposite of their proposal to pullback on fiscal policy and instead increase asset purchases as deflation is truly a concern for them. “In the next two months, the Fed is going to make it clear that they will not taper,” he predicts. “That's very bullish for Gold.” Tom McClellan, editor of the McClellan Market Report newsletter, is also a strong supporter for Gold. McClellan’s predicts at any time we could see a major Gold manufacturer begin cutting back its production or calling it quits. “We're getting down to the production price of Gold right now, and they won't continue producing Gold at that level for very long,” McClellan said.

William Dudley, president and chief executive officer of the Federal Reserve Bank of New York, advises that if future economic data does not meet the expectations that were discussed at last week’s policy meeting, the Fed may not keep their word on tapering monetary policy. “If labor market conditions and the economy's growth momentum were to be less favorable than in the FOMC's outlook — and this is what has happened in recent years —  I would expect that the asset purchases would continue at a higher pace for longer,” Dudley said. Dudley has a perpetual vote with fiscal policy and agreed last week with Ben Bernanke’s timeframe to cut back on asset buying.

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

• Gold, $1201.80, Down $30.00.
• Silver, $18.55, Down $0.16.

Closing Gold & Silver Market Report – 6/26/2013

MOMENTUM FOR GOLD SELL-OFF BUILDS DESPITE NEGATIVE GDP REVISION

Gold futures have fallen once again to new multiyear lows as the persistent fear of a reduction in the scale of quantitative easing continues to diminish the appeal of Precious Metals. The 23 percent decline in Gold price this quarter has many investors spooked, causing a sustained onslaught of panic selling in electronic markets. “A combination of dollar strength, economic progress and a re-rating to the market’s expectations of central-bank asset purchases are crushing prices,” SpreadEx financial trader David White said. Though Wall Street powerhouses Goldman Sachs and Credit Suisse have downgraded their short term projections for Gold,  some experts still tout exposure to Precious Metals  in any investment portfolio as an excellent hedge against inflation and geopolitical turmoil. Though the possible slowing of asset purchases has forced Gold and Silver lower, the volume of “new money” flowing into markets is expected to have long-term economic significance in propelling metals prices toward former highs.

Though short term investor sentiment has shifted toward riskier assets, the U.S. government has revised its  first quarter growth reports with GDP numbers falling  well short of earlier former predictions. Though we are well into the second quarter of 2013, some economists perceive the data as a possible deterrent to decreasing the current level of monetary stimulus. Though government and home construction show solid figures, every other major category was lower than expected.

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

• Gold, $1227.60, Down $49.50.
• Silver, $18.58, Down $1.07.

Gold prices are on track to lose nearly 25% this  Qs after sliding to a 34-mth low.

Wednesday - The August contract for gold fell more than 4% to $1,227.10 an ounce, taking the price down to the lowest level since August 2010. Prices had been nearly $1,600 at the start of the quarter and had topped $1,900 for the first time last August.

Morning Gold & Silver Market Report – 6/26/2013

GROSS DOMESTIC PRODUCT (GDP) MISSES MARK

While the Precious Metals market reached a three year low overnight, the lackluster U.S. GDP report has the market recouping some of its losses.  The first quarter economic growth in the United States was estimated at 2.4 percent however, the final revised number came in much lower at 1.8 percent.  This report could put a damper on talks of ending the Fed’s monetary easing program. While the growth is positive, many economists believe it will take more robust growth to get the Fed to change its easing course.

While the GDP report did slow the falling Gold price, the fact remains that the yellow metal is at a three year low. The positive economic conditions at the present time are not conducive to higher Gold prices. “We bought Gold for two reasons - because we were worried about the inflationary impact of policy and because we thought the financial system was going to fall apart.Although it may be completely the wrong judgment, the market has decided that none of those at the moment is a concern,” Sean Corrigan, chief investment strategist at Diapason Commodities Management, said.

At 9:00 am (EDT), the APMEX precious metals spot prices were:

• Gold, $1245.50, Down $31.50.
• Silver, $18.98, Down $0.67.

Closing Gold & Silver Market Report – 6/25/13

GOLD TRYING TO FIND SUPPORT

As the U.S. markets come to a close today,  Gold has added to its losses from yesterday.  Gold and other Precious Metals have been searching for some support in the market after the U.S. Federal Reserve pointed toward an exit to their easing program. “Concerns over credit-market conditions in China, rising U.S. bond yields and the uncertain economic outlook are triggering the current wave of selling. In the next few days, the commodity-specific data calendar is rather thin, so prices may find it difficult to stabilize in the absence of fresh impetus. The near-term outlook is challenging,” analysts at Credit Suisse wrote. 

There were new reports released today furthering the idea of a growing economy in the United States. Despite a rise in interest rates, the housing market continues to shine.  Sales of new homes increased by more than two percent, which beat forecasted projections.  Another sign of a growing U.S. economy is May’s durable goods report.  The report shows a rise of more than 3.5 percent, which beat forecast set by economists in the field.  The durable goods report has been seen as an indication of future business activity. “This is the missing piece for an upswing in economic activity,” Millan Mulraine, director of U.S. rates research at TD Securities USA LLC, said. “Business capital investment activity is off to a strong showing. If businesses start investing, they’ll add to their workforce.” 

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

• Gold, $1278.80, Down $0.70.
• Silver, $19.67, Up $0.06.

Morning Gold & Silver Market Report – 6/25/2013

CHINA CONCERNS FADE GOLD, STOCKS RISE

Stock futures and Precious Metals prices are on the rise this morning  after concerns about China have eased. VTB Capital analyst Andrey Kryuchenkov said, “Bullion showed little reaction to firmer equities and other commodities, including Platinum group metals and Silver, after the People's Bank of China tried to once more calm the market on liquidity concerns.” Kryuchenkov also added, “People will give extra weight to any U.S. [macroeconomic data] or [quantitative easing] related comments.”

In China, all it took to calm fears about the state of the country’s economy was a  People’s Bank of China official saying that the firm would monitorthe volatile money-market rates and keep them within a “reasonable range.” Nordea Bank’s Henrik Drusebjerg said, “It’s just a relief that they have accepted the value of communicating with the markets and are starting to try and dampen extreme fluctuations. I still think the markets over the summer will be quite nervous. The general view is a flat period when we are through it, but going through it definitely will not be flat. It will be a roller-coaster ride.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,283.10, Up $4.00.
• Silver, $19.76, Up $0.15.

Closing Gold & Silver Market Report – 6/24/2013

• Gold, $1,283.40, Down $10.60.
• Silver, $19.72, Down $0.36.

Morning Gold & Silver Market Report – 6/24/2013

CHINESE DATA A NEGATIVE FOR GLOBAL MARKETS

Global markets were hit hard by a more than 5 percent drop in the Chinese stock market Monday. This increased fears of a liquidity crunch, so much so that Goldman Sachs became the latest to cut its Chinese growth forecasts. European markets fell prey to negative results after the Shanghai stocks melted down.  Stephen Pope, managing partner at Spotlight Ideas, said, “I would suggest that almost all of the downward movement in U.S. futures...is due to the concern over the state of the Chinese economy and the implications for the rest of the world.” He continued on to say he believes we have overplayed the downside of the U.S. Federal Reserve story, but with China, “we have another excuse to trade with timidity.”

The Gold price pushed near a three year low in overnight trading as it lost nearly one percent on a stronger dollar. So far, this has been a difficult year for the Precious Metal, having lost 24 percent overall.  Danske Bank analyst Christin Tuxen said, “This is a fairly quiet week, with not much in the calendar, but with the dollar and U.S. Treasuries yields stronger, we see Gold remaining under pressure." Analysts have said that the $1,300 mark is a key level to watch.

At 9:13 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,288.50, Down $5.50.
• Silver, $19.86, Down $0.22.

Treasuries' Worst Week In 50 Years - Stocks Worst Week In 2013