Apmex Gold & Silver Market Report -- 8/31/2011

Morning Gold & Silver Market Report -- 8/31/2011
{Ryan Schwimmer), APMEX - Commentaries

PRIVATE JOBS REPORT DISAPPOINTS; INVESTORS OPTIMISTIC

In overnight trading, global stocks were largely higher (along with platinum and palladium), while gold and silver were mainly flat. U.S. stock futures are still up after the slightly disappointing ADP Private-Sector Jobs report, which showed a gain of 91,000 jobs this month. Investors are clinging to optimism, however, and one group of analysts explained it by saying, "With the decline in the stock market, debate in Washington, and [the] downgrade to the U.S. credit rating, it very much could have been worse." On tap for economic data today are releases of the Chicago purchasing managers index for August and factory orders for July.

In an effort to stimulate the troubled economy, specifically the housing market, the Obama administration is reported to be unveiling a mortgage relief program next week. The administration's last initiative, the Home Affordable Refinance Program, fell vastly below expectations. The program was targeted to save up to 5 million homes from foreclosure, but has only prevented slightly over 800,000 to this point.

China is looking to increase its holdings on gold and other commodities yet again. An adviser to the People's Bank of China told the China Business News that the emerging-market country should advance its position. The adviser, Xia Bin, said, "China should realize that gold is an important strategic reserve, and should increase its holdings over the long term, buying on price dips. In the past we have not established this as an investment principle, but now we must."

At 8:08 am (CT) the APMEX precious metals spot prices were:

Gold - $1,831,80 -- no change.
Silver - $41,84 -- up $0.31.
Platinum - $1,851.10 -- down $3.00.
Palladium - $785.40 -- up $5.70.

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Mid-Day Gold & Silver Market Report -- 8/31/2011
(Stephanie Chandler), APMEX - Commentaries

S&P GIVES SUBPRIME LOANS HIGHER RATING THAN U.S.

Precious metals are trading higher since early morning trading despite the rise in the stock markets. The better-than-expected numbers of the Chicago PMI and factory orders seem to have restored some faith and quelled consumer fears of a double-dip recession. Even Europe's markets closed much higher today.

Historically, gold moves with a negative correlation to stock markets, however the global financial crises still exist and consumers have not forgotten the safe haven of gold. Adrian Ash, head of research for BullionVault, commented on the safe haven of gold, "Gold isn't the perfect safe haven but it's the best one you are going to get." Ash addressed the skeptics of gold who drew back after last weeks' pull back in prices, "...gold is still a safe haven... [but] it doesn't mean it goes up every day."

One of the main contributors to the housing crash of 2008 was ratings companies giving high ratings to subprime mortgages, creating a false sense of safety. Now S&P has rated subprime mortgages higher than the U.S. rating. In a phone interview on Aug. 24, Gregory W. Smith, general counsel for the $41 billion Public Employee's Retirement Association of Colorado, said, "Everybody has been led to believe...that AAA means AAA means AAA across the board...anybody that didn't learn in 2008 that doesn't apply should find another line of work."

An interesting tid-bit coming out of Europe was that just recently an article was written in the Greek newspaper, Eleftherotypia, that earlier in the year Greece held a conference to consider leaving the euro.

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

Gold - $1,839.40 -- up $7.60.
Silver - $41.94 -- up $0.41.
Platinum - $1,859.00 -- down $4.90.
Palladium - $791.60 -- up $12.30.

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Closing Gold & Silver Market Report -- 8/31/2011
(Robert Davis), APMEX - Commentaries

FED PRESIDENT HINTS AT STIMULUS POLICY, BUT DISSENTION IS STRONG

Precious metals are closing the day close to where they opened, with all prices moving less than 1% for the day. Today's price movement, or lack thereof, indicates indecision in the market. Double-dip recession fears still pervade the market, but at the same time, many investors are moving into riskier assets, pursuing a value investment in what they see as underpriced equities.

Traders are closely monitoring recession-indicating manufacturing data, as well as comments by the Federal Reserve. Any further quantitative easing by central banks could add to the inflation fears, but the other side of the same coin are fears from volatile equities markets. Manufacturing data from the Institute for Supply Chain Management is due out tomorrow, and the weekly jobs report will be released Friday.

Dennis Lockhart, President of the Federal Reserve Bank of Atlanta, said that the Fed should be ready to provide more stimulus to the economy, possibly in the form of greater quantitative easing. He cited "the weak data we've seen recently and... the rising concern about chronic slow growth." The first half of this year was the weakest six-month period since the recession. However, three other Fed Presidents are against further stimulus, and voted to not approve the Fed statement in August that stated interest rates would remain low until mid-2013.

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

Gold - $1,829.00 -- down $2.80.
Silver - $41.63 -- up $0.10.
Platinum - $1,849.00 -- down $5.10.
Palladium - $785.80 -- up $6.50.