Apmex Gold & Silver Market Report -- 8/29/2011

The following is a commentary from APMEX

APMEX Morning Gold & Silver Market Report -- 8/29/2011
(Peter LaTona), APMEX - Commentaries

Record Prices Only Increase Chinese Demand for Gold -- Chinese investors are putting even more money into gold bars as gold prices rise. August is typically a slow month for Chinese jewelers, but many shops polled by Reuters in Shanghai are reporting solid gold sales for the month. "The surge in prices has sparked another gold-buying craze. The 50 gram and 100 gram gold bars were selling like hot cakes," said Ms. Liu, a store manager at Shanghai's major jeweler Lao Feng Xiang, who said gold sales this month were up at least 30 percent from a year ago." China is rapidly gaining on India as the world's leading consumer of gold and according to recent data from the World Gold Council, these two countries make up 52% of the world demand for gold.

Precious metal prices rose across the board, when Asian markets opened Sunday at 5PM (CT). They have continued to hold their gains overnight. U.S. stock futures are up sharply, as the damage from Hurricane Irene is apparently less than what was feared on Friday.

Alpha Bank SA, Greece's third largest bank is buying Eurobank Ergasias SA, thus creating Greece's largest lender. This merger is seen as an important step in strengthening the private sector economy and deters the nationalization of Greek banks. Alpha Bank rose 30% and Eurobank rose 29% on the Athens Exchange, which pulled the entire banking industry up along with them. Greek stocks also climbed to its best gain in more than 20 years.

Central bankers are becoming more alarmed that after four years of pumping money into the system, the global economy is still teetering and central bank policies are ill-equipped to help. Christine Lagarde, the International Monetary Fund's new Managing Director said on Saturday, "We risk seeing the fragile recovery derailed. Those risks have been aggravated, she said, by the publics' sense that policy makers' response has been inadequate. "We are in a dangerous new phase." There is a growing concern that the U.S. and Europe could fall into another recession before completely coming out of the one they just experienced.

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

Gold price - $1,817.60 -- up $18.40
Silver price - $41.22 -- up 15 cents
Platinum price - $1,840.80 -- up $12.90
Palladium price - $761.50 --up $3.40

---

Mid-Day Gold & Silver Market Report -- 8/29/2011
(Robert Davis), APMEX - Commentaries

STOCKS UP AGAIN ON STRONG ECONOMIC DATA, GOLD HOLDS RELATIVELY STEADY

Gold has turned lower but only lost modest ground in morning trading. Losses were pared mostly due to some demand as a safe haven, although many investors are feeling more confident in riskier markets, pushing stocks up strongly.

Consumer spending, regarded by many as the main driver of U.S. economic activity, increased 0.8% in July, after slipping slightly in June. This data is good news for many investors, as it helped push stock prices substantially higher. It also shows that the U.S. may not be quite as close to recession as was feared a few weeks ago. Joel Naroff, chief economist at Naroff Economic Advisors in Holland, Pennsylvania said, "It's a little far-fetched to truly believe that we are headed into another recession. This data doesn't support that view at all."

Damage left by Hurricane Irene appears to have largely been more mild than originally anticipated, and business has resumed in most of the New York City area. However, flooding remains a problem in surrounding areas which received massive rainfall. It seems the worst-case scenario was avoided.

At 2PM (CT) the APMEX precious metal prices were:

Gold price - $1,787.60 -- down $11.90
Silver price - $40.80 -- down $0.28
Platinum price - $1,827.60 -- down $0.30
Palladium price - $757.40 -- down $0.70

---

Closing Gold & Silver Market Report -- 8/24/2011
(Craig C. Calvin), APMEX - Commentaries

GREEK STOCKS SHOOT UP, BUT FINLAND WANTS COLLATERAL; CHINA'S GOLD BUGS KEEP BUYING

Gold closed out the day lower than it had last Friday, after experiencing both highs and lows that brought the price per ounce up over $1,840 per ounce and down to nearly $1,781 per ounce during intraday trading. Gold futures for December delivery ended down $5.70 for the day. Silver, platinum, and palladium all ended the day down slightly as well. U.S. stocks experienced a jump, with the S&P 500 enjoying its first weekly gain since last month, with investors seemingly relieved over Hurricane Irene's less-than-expected damage quotient and Fed Chairman Ben Bernanke's lack of indication of any plans for more quantitative easing.

In response to the news of a merger between two prominent Greek banks, Alpha Bank SA and EFG Eurobank Ergasias SA, stocks in Greece shot up to a 21-year high. The banks, which plan to join together and sell new equity, both saw jumps of 30%, while other banks in Greece saw gains as well. Meanwhile, Jean-Claude Trichet, president of the European Central Bank (ECB), is pushing governments in the Eurozone for quick action on implementing the Greek bailout agreement that was reached on July 21st of this year. In comments made to the European Parliament's economic affairs committee, the ECB president stated, "The full and timely implementation of the July 21 agreement between heads of state or government is of essence." However, something that could delay such an implementation is Finland's demand for collateral in exchange for making loans to Greece. Talks are being held between officials from Germany and Finland in an attempt to reach a compromise.

According to Reuters, Chinese investors, instead of being deterred by gold's recent record prices, have aggressively spent money on the precious metal, buying up gold bars and bullion-based derivatives. During the month of August, in what is usually a slow month, Chinese jewelers reported uncharacteristically solid sales of gold despite the price increases of the past few months. A store manager for Lao Feng Xiang, a major jeweler in Shanghai, explained that gold sales have increased at least 30% over sales for same time last year, saying, "The surge in prices has sparked another gold-buying craze. The 50 gram and 100 gram gold bars were selling like hot cakes." The popularity of gold in China will likely continue to influence the price of gold in the future.

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

· Gold - $1,792.50 - Down $6.80

· Silver - $41.03 - Down $0.05

· Platinum - $1,827.90 -- No change at $0.00

· Palladium - $757.60 - Down $0.50