Apmex Gold & Silver Market Report -- 8/24/2011

The following is a commentary from APMEX

APMEX Morning Gold & Silver Market Report -- 8/24/2011
(Stephanie Chandler), APMEX - Commentaries

STOCKS REBOUND ON NEWS OF JULY'S DURABLE GOODS ORDERS

Precious metals are down slightly in early morning trading from yesterday's close trading due to profit taking. News that July's durable goods orders beat expectations coming in at 4% has stocks rebounding from early morning lows to trade even this morning.

Some feel Germany is showing the first signs of a struggle as they carry the load for the eurozone debt crisis, and news of even more change in the bailout package for Greece has continued to fuel fears. Moody's Investor Service has cut Japan's credit ratings from Aa3 to Aa2 with a stable outlook. Bernard Sin, Head of Currency and Metal Trading at bullion refiner MKS Finance SA in Geneva comments on the retreat of gold prices to say "We've seen a bit of bargain-hunting and people are happy to buy [after the drop]. People are still very concerned. One of the only avenues still open is gold."

The markets continue to anticipate a QE3 announcement from Bernanke at this Friday's Jackson Hole meeting and a statement from the Group of Seven (consisting of finance ministers and central bank governors) made earlier this month to add to this anticipation, stating they were "committed to taking all necessary measures to support financial stability and growth."



At 8:08AM (CT) the APMEX precious metal prices were:

Gold price - $1,840.40- down $22.90.
Silver price - $41.55 -- down $0.85.
Platinum price - $1,869.60 -- down $11.50.
Palladium price - $760.80 -- down $5.50.

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Mid-Day Gold & Silver Market Report -- 8/24/2011
(Craig C. Calvin), APMEX - Commentaries
CAUTION AND CONCERN AHEAD OF BERNANKE SPEECH; CBO PREDICTS SLOW GROWTH

Gold prices have dropped dramatically today, as investors reacted to both a recovery by stock markets and positive U.S. economic data. With people taking profit by selling off their gold holdings, gold futures have fallen by more than 4% so far today. Stock performance has been mixed so far, as investors are staying cautious ahead of a planned speech by Federal Reserve Chairman Ben Bernanke this Friday.

Anticipation is building for the speech that Bernanke will give at a meeting of international central bankers in Wyoming this Friday. At last year's meeting, Bernanke hinted at the economic measures that eventually became QE2, and there is speculation that his speech this year will provide similar hints about a possible QE3. However, some analysts who are disappointed at what is perceived to be the failure of QE2 to remedy the U.S.'s economic problems are expressing doubt about another round of quantitative easing. In a recent research note, John Higgins, senior markets economist at Capital Economics, stated, "There is little reason to expect (the economy) to warm in the event of QE3, unless the Fed acted much more boldly than it has in the past." Higgins also expressed the opinion that the same measures the Fed has used in the past would do little to boost economic growth now, saying that it would take something "far bigger."

A report released today by the Congressional Budget Office predicts that economic growth will remain slow through 2012 and that the unemployment rate at 9.1% now will likely only drop to 8.5% a year from now. In the report, the CBO also estimates that the federal budget for this year will be $1.3 trillion, despite the deficit decreases that will be achieved in the wake of the budget deal reached in early August. The CBO warned that deficits could be even higher if the tax cuts enacted by former President George W. Bush are continued after their 2012 expiration.

At 12:22 PM (CT), the APMEX precious metals spot prices were:

· Gold - $1,761.40 - Down $101.70

· Silver - $39.37 - Down $3.04

· Platinum - $1,821.80 - Down $59.30

· Palladium - $744.00 - Down $22.30

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Closing Gold & Silver Market Report -- 8/24/2011
(Robert Davis), APMEX - Commentaries

GOLD FALLS AS TRADERS CASH OUT, TAKE RISKIER BETS

Gold fell substantially today as traders moved into riskier markets, like stocks, in anticipation of the announcement of a third round of quantitative easing.

Glenn Hubbard, dean and Russell L. Carson professor of finance and economics at Columbia Business School, and former chairman of the Council of Economic Advisors doesn't believe QE3 will actually happen. "The affect of a QE3 would be relatively modest, and it might risk raising inflationary expectations, so I doubt it." Inflationary pressures could push gold upwards, and if QE3 does happen, gold could benefit as traders feel less comfortable holding cash positions that are being continually diluted by an aggressive move by the Fed to print more money.

However, it looks like many investors are expecting some kind of QE3 announcement on Friday, as the market is already seeing prices set up in anticipation. If Bernanke makes no mention of a new stimulus program in his announcement then markets could be in for a surprise, which could increase volatility and possibly push gold higher.

At 4:15AM (CT) the APMEX precious metal prices were:

Gold price - $1,756.00 - down $107.30
Silver price - $39.81 -- down $2.59.
Platinum price - $1,807.50 -- down $73.60.
Palladium price - $747.50 -- down $18.80