Apmex Gold & Silver Market Report -- 8/5/2011

The following is a commentary from APMEX

APMEX Morning Gold & Silver Market Report -- 8/5/2011
(Ryan Schwimmer), APMEX - Commentaries

PAYROLLS DATA EASES FEARS, BRINGS SUPPORT TO STOCK MARKET

The highly anticipated payrolls report was released this morning, and it showed an increase of 117,000 jobs in July. The unemployment rate fell .1% to 9.1%. These numbers were better than expected, finally bringing some relief to Wall Street after two days of tension. Stock futures are up more than 1%, just a day after the biggest selloff since 2009.

Gold gave up early gains amid the news, but one analyst says that South Korea's recent purchase of gold signals that it's still not too late to buy gold. An executive of one company stated that South Korea's purchase is "significant, as it represents the first purchase of gold by the East Asian country in over a decade. It would seem South Korea have joined the ranks of those countries that have lost faith in the U.S. dollar ... it is no coincidence that many of these central banks are from emerging-market economies. Many of these countries have experienced the grim reality of enduring a currency crisis first-hand."

At 8:00 am (CT) the APMEX precious metals spot prices were:

Gold - $1,657.10 -- Down $0.90.
Silver - $38.89 -- Down $0.60.
Platinum - $1,707.00 -- Down $22.40.
Palladium - $739.30 -- Down $15.70.

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Mid-Day Gold & Silver Market Report -- 8/5/2011
(Timothy Oakes), APMEX - Commentaries

POLITICIANS TAKING HEAT FOR DOWNTURNED GLOBAL ECONOMY

The root cause of global market conditions is seen by a number of economists as a direct failure of politicians, globally, to tackle their excessive sovereign debt problems. George Magnus, Senior Economic Adviser at UBS in London, said, "People have just become spooked by a crass failure of political leadership...There are economic solutions to economic problems, but no politicians are stepping up to the plate." In the U.S., economic conditions are better in comparison to the late-2008 recession. Corporate earnings are flush, banks have more capital, emerging markets are growing, and there is no repeat of a global liquidity squeeze that sent the value of the dollar soaring. The U.S. economic downturn is attributed to overall slowdown in growth, breeding a lack of confidence which was seen as inevitable due to debt being incurred and a lack of savings taking place.

The European Central Bank has agreed in principle to purchase Italian and Spanish bonds. The agreement is pending fiscal policy measures being enacted by each country. France and Germany are applying their political pressure to help speed negotiations towards a resolution. There has not been mention of austerity measures needing to be implemented, but some government reform would be required. This news has caused a more positive look for U.S. stocks as well.

The jobs data, released this morning, as well as the overall concern over global economic performance, has heightened the appeal of gold from a safe-haven perspective. According to Arne Lohmann Rasmussen, an analyst with Danske Bank, Gold is "one of the few safe havens left in the financial world at the moment."

At 12:01 pm (CT) the APMEX precious metals spot prices were:

Gold - $1,659.50 -- Up $1.70.
Silver - $38.51 -- Down $0.99.
Platinum - $1,715.20 -- Down $14.20.
Palladium - $745.90 -- Down $9.10.

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Closing Gold & Silver Market Report -- 8/5/2011
(Craig C. Calvin), APMEX - Commentaries

DOLLAR FALLS AGAINST THE EURO; WALL STREET ENDS WORST WEEK SINCE 2008

Media reports out today that the European Central Bank (ECB) plans start purchasing Italian bonds caused the dollar to fall against the euro in trading this afternoon. Other currencies including the franc (Switzerland) and the yen (Japan) also outperformed the dollar as fears about the state of the U.S. economy persisted. A chief currency strategist with Oanda Corp. explained the reason for the euro's gain by explaining that the ECB's intention to buy Italian bonds (and Spanish bonds as well) "...indicates they're actually focusing on the real, current problem with financing in both Italy and Spain."

The price of gold experienced its second drop in as many days as investors sold off their gold holdings to raise the money needed to cover other losses. With many investors worried about debt issues both here in the U.S. and abroad and staying away from the market, the resulting losses have led to a selloff of gold to meet margin calls, and that selloff has resulted in gold's price drop these past two days. A senior strategist with MF Global Holdings Ltd. said in an interview today, ""It's a volatile period for gold. You would think that people would buy gold as a haven now, but they're selling it because they need to raise cash."

Wall Street's worst week since November of 2008 came to an end today. Economic fears in the United States and Europe led to huge stock selloffs, and as a result Nasdaq saw a fall of 8.1% for the week, the S&P 500 a fall of 7.2% for the week, and the Dow a fall of 5.8% for the week.

At 4:15 pm (CT), the APMEX precious metals spot prices were:

· Gold - $ 1,664.80 - Up $6.80

· Silver - $38.39 - Down $1.10

· Platinum - $1,721.50 - Down $7.90

· Palladium - $746.00 - Down $9.00