Apmex Morning Gold & Silver Market Report -- 9/1/2011

APMEX Morning Gold & Silver Market Report -- 9/1/2011
(Ryan Schwimmer), APMEX - Commentaries

JOBLESS CLAIMS MIXED; LAGARDE SHOWS BACKBONE

U.S. stock futures are pointing to a low start for Wall Street this morning, after a night of mixed trading that now has precious metals mostly flat. Losses in stock futures were pared after the weekly jobless claims report showed a drop of 12,000 claims from last week. However, the four-week moving average climbed by 1,750 claims, and is thought to be a better indicator of trends. Investors now await a key manufacturing report due later this morning, and expectations are that this index will dip below 50%, meaning manufacturing activity contracted.

European Central Bank policymaker Jeurgen Stark said recently, "The [debt] crisis is not over. Not just in Europe is it not over, it is also not over in other regions of the world." He also says that the U.S. has an "enormous" debt problem, and that the fundamentals are lacking that would help correct the issue.

When Christine Lagarde was named International Monetary Fund chief, many critics felt she would not be tough on her former peers in Europe. Those fears were squashed as she stated that European banks should be recapitalized by force. The European banking system as a whole is being called in to question, as Jacob Kirkegaard of the Peterson Institute for International Economics claims. "Markets fundamentally don't believe that many of Europe's banks hold enough capital," he said. "They thus question the solidity of the entire European banking system."

At 8:06 am (CT) the APMEX precious metals spot prices were:

Gold - $1,830.50 -- down $3.20.
Silver - $41.78 -- down $0.06.
Platinum - $1,848.00 -- down $9.20.
Palladium - $779.70 -- down $10.80.

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Mid-Day Gold & Silver Market Report -- 9/1/2011
(Timothy Oakes), APMEX - Commentaries

DATA BOOSTS CONFIDENCE, GREECE STILL JEOPARDIZED

Since the Morning Gold & Silver Market Report, precious metals have generally stayed the course. Gold has slipped a little based on hope of another round of quantitative easing, as well as the better-than-expected manufacturing and jobs data.

This morning most analysts had predicted a drop below 50 on the Institute for Supply Management (ISM), but were pleased to see the reading still above 50. This does not mean recession fears will suddenly dissipate, but it is definitely more confidence-inducing to see a projected drop in jobless claims and better-than-expected manufacturing data. According to John Silvia, chief economist at Wells Fargo in Charlotte, NC, "The net result is a slowdown, disappointing growth for the third quarter but not a recession."

Any European rescue is facing some serious political issues. To put it into perspective, the United States has (for the most part) a two-party system. The euro zone has 17 different governments to account for. Finland has stepped out and wants to protect itself in any deal; others will most surely follow. The fund for protection is called the European Financial Stability Facility (EFSF). There are still hurdles in place that threaten the Greek bailout, especially the demands for collateral from some of the other governments in the euro zone. "The final construct just looks so far away now, it's eroding the fund's effectiveness when it finally gets up and running," said Julian Callow, Chief European Economist at Barclays Capital in London. "The political squabbling is doing it a great disservice."

At 12:07 PM (CT) the APMEX precious metals spot prices were:

Gold - $1,830.30 -- down $3.20.
Silver - $41.73 -- down $0.11.
Platinum - $1,854.20 -- down $3.00.
Palladium - $790.00 -- down $0.50.

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Closing Gold & Silver Market Report -- 9/1/2011
(Stephanie Chandler), APMEX - Commentaries

PREDICTIONS SAY UNEMPLOYMENT RATE IS 9%

Precious metals are trading slightly lower today, partly thanks to the U.S. dollar strengthening. Investors likely took profits in gold and stayed out of stocks, waiting on Friday's jobs report. As a result of the dollar rallying, gold looks more expensive to other countries. Director of tactical investments at Waverly, Adam Grimes, says he sees no good reason why the dollar is trading higher other than technical trading.

The White House Office of Management and Budget released their number for the mid-session review, predicting real GDP growth at 2.6% and an unemployment rate of 9%. Jacob Lew, Office of Management and Budget Director, said, "The MSR largely confirms what we already new -- and what CBO already released -- it underscores that we need to get back on a sustainable path, and that we need to invest in long-term economic growth and job creation."

Some are saying Germany's financial slowdown may be a good thing for the eurozone.

At 4:00 PM (CT) the APMEX precious metals spot prices were:

Gold - $1,830.90 -- down $3.80.
Silver - $41.73 -- down $0.11.
Platinum - $1,853.00 -- down $4.20.
Palladium - $786.40-- down $4.10.