Gold, Silver Fall Back Ahead of Fed Meet

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Gold and silver were headed lower Wednesday morning amid conflicting signals from earnings reports, economic data and resurgent eurozone credit worries.

Spot gold was down 0.21%, bid at $1,638.10 as of 11:21 a.m., having traded as high as $1,645.90 and as low as $1,635.70 an ounce, according to Kitco market data. The London afternoon reference price was set at $1,637.75, $12.25 an ounce lower than Tuesday’s afternoon reference price.

Spot silver was showing a 1.27% loss, bid at $30.44. The morning high as of time of writing was $31.10 and the low was $30.32. Wednesday’s reference price was set at $30.88 an ounce in the London a.m., two cents an ounce above Tuesday’s price fix.

While Apple‘s (NASDAQ:AAPL) big earnings beat, along with better-than-expected Q1 earnings reports from industrial-sector leaders such as 3M (NYSE:MMM) are whetting investors’ risk appetites, eurozone credit risks and a possible “hard landing” for the Chinese economy are throwing cold water on them.

The U.K. is the second European economy to have slid back into recession in Q1 — and today’s durable-goods-orders report doesn’t help. U.S. durable goods orders fell to their lowest level since January 2009, the Commerce Dept. reported, falling 4.2% in March. March’s decline follows February’s revised gain of 1.9%.

Markets are on Fed alert as the Federal Reserve Open Market Committee (FOMC) is set to close its two-day meeting today, with Fed Chairman Bernanke expected to hold a press conference this afternoon. While indicators point to a slowing U.S. economy as Q1 wore on, the Fed’s Operation Twist portfolio restructuring, designed to keep a lid on long-term interest rates, is due to expire June 30.

Gold bullion prices dropped sharply and then recovered to end morning trading unchanged at $1,642 an ounce Wednesday, according to BullionVault’s London Gold Market report.

The results of the FOMC meeting could move the market significantly one way or the other, according to market participants. “Any suggestions of further [quantitative easing] could see gold prices move towards $1,670,” BullionVault quoted today’s commodities note from South Africa’s Standard Bank.

“If the statement is unchanged from the last meeting, we expect the physical market to buy dips towards $1,600 — as it has done since beginning March.”

Gold trusts were hovering around the unchanged market, while the iShares Silver Trust was showing losses.

The SPDR Gold Trust (NYSE:GLD) was moving around unchanged.
The iShares Gold Trust (NYSE:IAU) was hovering around flat line as well.
The iShares Silver Trust (NYSE:SLV) was nearly 1.8% lower.

Gold and silver mining ETFs were once again rebounding from Monday’s sharp drop.

The Market Vectors Gold Miners ETF (NYSE:GDX) was showing gains of around 1%
The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was up around 0.8%.
The Global X Silver Miners ETF (NYSE:SIL) was around 1% higher.

Gold mining shares were showing healthy morning gains Wednesday.

Agnico-Eagle Mines (NYSE:AEM) was showing gains of more than 1.9%.
Barrick Gold (NYSE:ABX) was up some 0.5%.
Eldorado Gold (NYSE:EGO) was up around 3%.
Goldcorp (NYSE:GG) was showing gains of 0.7% and more.
Kinross Gold Corp. USA (NYSE:KGC) was higher, up around 1%.
Newmont Mining (NYSE:NEM) was up more than 1%.
NovaGold Resources (NYSEAMEX:NG) was some 2.4%.
Yamana Gold (USA) (NYSE:AUY) was up more than 1.9%.

Silver mining shares were showing healthy morning gains as well.

Coeur d’Alene Mines (NYSE:CDE) was showing gains of around 1.3%.
Hecla Mining (NYSE:HL) was around 1.5% higher.
Pan American Silver (NASDAQ:PAAS) was showing gains around 0.9%.
Silver Wheaton (NYSE:SLW) was up around 1.15%.
Silver Standard Resources (NASDAQ:SSRI) was up around 1.8%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.


Article printed from InvestorPlace Media, https://investorplace.com/2012/04/gold-silver-fall-back-ahead-of-fed-meet/.

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