Morning Gold & Silver Market Report – 2/19/2013
February 19, 2013SEQUESTER BEGINS MARCH 1, COULD WORK AGAINST ECONOMY
Gold and Silver prices gave up some early gains this morning, as investors seem to have a better opinion of the global economy. However, there is much discussion around the beginning of the automatic spending cuts that would come with the sequester in the U.S. “There is no real negotiation between Democrats and Republicans on a compromise and the beginning of the sequester on March 1, therefore seems to be inevitable,” strategists at R.J. O’Brien wrote. They continued, “Once the spending cuts hit, Republicans and Democrats will assess the extent of the stock market damage and any public outcry at defense industry layoffs, furloughs of government workers, and cuts in services for services such as meat inspections and flight controllers.” In the past, economic uncertainty has been a boon for the Gold price.
With the better opinion of the economy specifically in the U.S., the dollar is gaining on its rivals. Historically, a stronger dollar has meant a lower Gold price, and it’s clear that the dollar is working against the Gold price at the moment. Physical demand, of course, is the other side to the story, and Yuichi Ikemizu of Standard Bank said, “We have seen very good physical demand from Southeast Asia and China. Asians are buying, but it is offset by the selling from funds in the Western market.”
At 9 a.m. (EST), the APMEX Precious Metals spot prices were:
- Gold, $1,611.20, Up $0.80.
- Silver, $29.96, Up $0.06.