Apmex Gold & Silver Market Report -- 8/30/2011

The following is a commentary from APMEX

APMEX Morning Gold & Silver Market Report -- 8/30/2011
(Ryan Schwimmer), APMEX - Commentaries

"LITTLE TO BE CONFIDENT ABOUT" WITH ECONOMY

Gold, silver, platinum, and palladium were mostly flat in overnight trading, but have recently swung higher. U.S. stock futures are pointing to a low start for Wall Street, as investors await the release of economic data regarding consumer confidence. Consumer confidence is expected to show a sharp decline. The Case-Shiller index, which tracks home prices, fell in June by 0.1% from May, and 4.5% from June 2010. Also on tap is the release of the minutes from the Federal Open Market Committee meeting from August 9 this afternoon.

The President of the Chicago Fed said this morning that he is supportive of more easing. He described the jobs market as "recession-like," and added that the economy seems to be "moving sideways." He pushed for more easing at the August 9 FOMC meeting than what actually came about, with interest rates remaining at near-zero levels for the next two years.

The politicians in Washington are at it again, as Representative Eric Cantor has said that there will be a federal role in the recovery of damage from Hurricane Irene, but there's a catch. In an all-too-familiar tone, the No. 2 Republican says that his peers are "going to make sure that there are savings elsewhere" before finding the money to aid in the recovery. Democratic Senator Mary Landrieu retorted, saying, "It makes no sense to cut programs that help respond to future disasters in order to pay for emergencies that have already occurred."

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

Gold - $1,831.50 -- up $37.90.
Silver - $41.66 -- up $0.99.
Platinum - $1,845.00 -- up $19.00.
Palladium - $769.60 -- up $13.90.

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Mid-Day Gold & Silver Market Report -- 8/30/2011
(Stephanie Chandler), APMEX - Commentaries

S&P "CLOSELY MONITORS" EUROPE FOR DOUBLE DIP RECESSION

Precious metals are still trading higher today, with gold and silver down slightly from this morning's highs. News of consumer confidence deteriorating and the Case-Shiller index declining has spurred precious metals buying. Also contributing to higher precious metals prices are the continued rumors of quantitative easing, which would add to inflation, thanks to the comments made by Chicago Federal Reserve President Charles Evans. Evans believes that quantitative easing is one of the only ways the U.S. will be able to lower unemployment numbers.

"Consumer confidence deteriorated sharply in August, as consumers grew significantly more pessimistic about the short-term outlook," said Lynn Franco, director of The Conference Board Consumer Research Center. Franco also stated that it fell from 59.2 in July to 44.5 in August, the lowest since April of 2009. The U.S. isn't the only country suffering from lack of consumer confidence as Europe released their consumer confidence numbers that showed a drop from .09 in July to a negative 2.9 in August. Daniel Hartmann, an economist at Zug, Switzerland-based Bantleon Bank AG and what Bloomberg has called their most accurate European forecaster in their history, comments, "The risk of recession in the euro area has clearly increased as demand from Asia is flagging and governments' efforts to cut fiscal deficits are curbing domestic consumption...I expect the indicator to decline further in the coming months."

Standard & Poor's wrote today that downside risks "are significant" and that they will "closely monitor" the trends in consumer demands in these next quarters. Jean-Claude Tichet, ECB President, comments, "Looking ahead, we continue to see the euro-area economy growing at a modest pace...at the same time, not least because of the recently re-emerged tensions, in financial markets, uncertainty remains particularly high," in Europe.

At 12:00 pm (CT) the APMEX precious metals spot prices were:

Gold - $1,831.50 -- up $35.80.
Silver - $41.37 -- up $0.70.
Platinum - $1,849.00 -- up $23.00.
Palladium - $777.60 -- up $21.90.

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Closing Gold & Silver Market Report -- 8/30/2011
(Robert Davis), APMEX - Commentaries

Gold traded slightly higher this afternoon after surging in morning trading, closing up more than 2%. Stocks fell back from their peek this afternoon while gold continued to climb. Silver also made solid gains and also closed higher by almost 2%.

The minutes from the meeting of the Federal Open Markets Committee were released this afternoon. The minutes show that many policy makers at the Federal Reserve are showing support for a more aggressive stimulus move by the Fed than what was outlined by Ben Bernanke at the Jackson Hole conference. The members of the Fed in favor of more stimulus point to consistent fears of a double-dip recession in Europe and a stubbornly high unemployment rate here at home. Proposed steps are a swap of short-term U.S. bonds to long-term bonds, probably pushing interest rates on long-term consumer debt (like mortgages) lower. The Fed could also lower key interest rates past their already-low rates.

Bill Gross, founder and CEO of Pimco, the company that oversees the world's largest mutual funds, says that he sees a danger of a recession in what he calls the "developed econom[ies]" of the U.S. and Europe. His strategic view sees more stability and safer bets in Australia, Mexico, the U.K., and Canada.

At 04:15 pm (CT) the APMEX precious metals spot prices were:

Gold - $1,839.60 -- up $46.00.
Silver - $41.46 -- up $0.79.
Platinum - $1,857.60 -- up $31.60.
Palladium - $774.10 -- up $18.40.