Gold & Silver Market Report -- 8/18/2011

Morning Gold & Silver Market Report -- 8/18/2011
(Peter LaTona), APMEX - Commentaries

Stocks Plunge Overnight - Gold is Surging -World equity markets are plunging overnight and the European banks are the cause for concern. Major Banks across the euro zone are sharply lower, as the news broke that the European Central Bank lent $500 million Euros to a euro zone bank, that had not requested a loan since last February. Although no details were offered, the market reads this as another sign of escalating difficulties in the European financial system, which could also affect U.S. banks.

The U.S. stock futures are also down sharply this morning, as a result of the concerns coming out of Europe. Investors are once again moving to assets like gold, which has crossed the $1800 mark. As if another dark cloud was needed, Morgan Stanley cut its 2011 and 2012 global growth forecast and stated, "we are dangerously close to a recession."

This morning's job's report will not calm the equity markets. The jobless claims were up 9000 to 408,000 for the week ending August 13th. This was higher than the projected rise to 400,000 as expected by economists polled by Bloomberg News. "Indicators suggest a deterioration in overall labor market conditions in recent months," the Federal Open Market Committee said in a statement on Aug. 9 after its meeting.

The Consumer Price Index (CPI) also came out with disappointing news this morning. It rose 0.5% in July, which was the largest gain since March. Economists polled by Reuters had expected a 0.2% gain. This will only ignite concerns about the probability of inflation and is likely a factor in today's spike in gold prices.

At 8AM (CT) the APMEX precious metal prices were:

Gold price - $1,822.00 -- up $26.20
Silver price - $40.79 -- up 33 cents
Platinum price - $1,841.00 -- up 20 cents
Palladium price - $767.00 -- down $10.90

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Mid-Day Gold & Silver Market Report -- 8/18/2011
(Ryan Schwimmer), APMEX - Commentaries

PHILLY FED INDEX DOES NOT LOOK GOOD FOR ECONOMY

Gold has added to gains this morning while silver has fluctuated slightly, but is overall flat since the morning. The stock market, however, is sharply down (as much as 528 points) since the Philly Fed factory index was released this morning. Investors are flocking to safe haven investments such as gold as the volatility of the stock market is at all-time highs.

Gold is well on its way to a settlement record, and a portfolio manager with OptionSellers says that "[t]here's so much talk about a double dip [recession] ... It seems as though gold is the last safety net available." The record run is continuing thanks to dismal economic reports released today. The jobless claims report was expected to increase by 1,000, and it increased by 9,000. More importantly, perhaps, was the release of the Philly Fed factory index, which was expected to show a positive 0.5 in August. When the index was released, it showed a drop to negative 30.7. The subzero reading indicates contraction in factories in the Philadelphia region.

Fears of a slowing global economy and another recession has also caused the stock market to plummet. Marc Chandler of Brown Brothers Harriman & Co. wrote, "Market sentiment continues to deteriorate amid concerns about the euro-zone banking sector." The Federal Reserve is taking action on worries that the eurozone debt crisis could spread to the U.S. banking system.

At 12:24 pm (CT) the APMEX precious metals spot prices were:

Gold - $1,825.00 -- Up $29.20.
Silver - $40.79 -- Up $0.33.
Platinum - $1,842.80 -- Up $2.00.
Palladium - $754.00 -- Down $23.90.

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Closing Gold & Silver Market Report -- 8/18/2011
(Robert Davis), APMEX - Commentaries

VOLATILE MARKETS FALL AGAIN WHILE GOLD CONTINUES TO SHINE

Gold has increased gains since the mid-day, and is edging closer to a 2% gain on the day. Stocks and almost every commodity besides precious metals closed sharply lower today.

Inflation indexes ticked higher last month, according to data released by the Fed. The Consumer Price Index, the Fed's primary measure of inflation, increased 0.5% in July. On an annual basis, this indicates a 6% rise in prices consumers pay for goods. This annualized rate is more than double the Fed's stated inflation target of 2-3%.

Residential real estate also slowed more than expected in July, with existing home sales falling 3.5%, while economists expected a rise of 3.8%. Pierre Ellis, a senior economist at Decisions Economics, said, "The home sales number is beginning to creep downward. It gives the appearance of melting away, contributing to consumer sector worries. And that was even before the recent financial market volatility."

Gold continues to shine in its role as an asset class, showing its tendency to hold or increase in value while other asset classes are declining. "The most recent economic data is what's guiding all asset classes. This means that just about everything but gold is falling right now," said Adam Sieminski, Chief Energy Economist at Deutsche Bank.

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

Gold - $1,829.00 -- Up $33.20.
Silver - $40.77 -- Up $0.31.
Platinum - $1,844.20 -- Up $3.40.
Palladium - $759.30 -- Down $18.60.