Gold & Silver Digest: 5/3/13
The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.
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5/3/13 8:42 PM EST US close metals price quotes from Finviz
Gold ended flat on Friday, erasing earlier gains after faster-than-expected U.S. job growth reduced any need for the Federal Reserve to boost monetary stimulus.
Bullion posted a 0.3 percent gain for the week, extending last week's rally of more than 4 percent.
The metal came under pressure as the S&P 500 and Dow industrials rallied to intraday records after data showed U.S. nonfarm payrolls rose 165,000 last month and the jobless rate fell to 7.5 percent, the lowest since December 2008.
For the second time in his incredible career, Jeffrey Vinik is quitting a top money management job after being unable to keep up with a vigorous stock-market rally.
As both the Dow Jones Industrial Average and the Standard & Poor’s 500 index hit all-time highs on Friday, Vinik told his investors he would be closing Vinik Asset Management, his $6 billion hedge fund firm. Bloomberg News reported that Vinik informed his investors that his fund has been down 4.8% since last July, a 10-month period that has seen the stock market scale a wall of worry.
Gold futures finished with a modest loss on Friday as better-than-expected U.S. employment figures dulled the precious metal’s safe-haven appeal.
For the week, however, gold found support from the European Central Bank’s decision to cut interest rates and from strength in physical demand to end the week 0.7% higher.
Copper futures rallied nearly 7% for their biggest one-day percent gain in over two and a half years, as the jobs data brightened demand prospects for the industrial metal.
Arizona Governor Jan Brewer vetoed a measure on Thursday that would have made gold and silver legal tender in the state, saying the legislation could have resulted in lost tax revenue.
The Republican-controlled state legislature voted through the measure last month in a response to what backers said was a lack of confidence in the international monetary system.
The bill called for Arizona to make gold and silver coins and bullion legal tender beginning in mid-2014, joining existing U.S. currency issued by the federal government.
This from UBS:
"On the physical front, strong appetite out of Asia continues. Our index of physical flows to India continues to indicate very strong demand coming in, at least five times the average over the last 12 months.
Premiums in India are now quite high, particularly for the 0.9995 purity kilo bar, the more popular product, amid extremely limited supplies at the moment."
The bullion supply lines for this recent market operation seem a bit overextended and ill equipped for the ferocious waves of physical buying that has been reported, especially in Asia.
Don’t let the lackluster showing for silver prices in 2013 fool you – things are about to change.
Indeed, the white metal’s performance so far has been uninspiring. Silver prices ended April down $4.14 an ounce, or 14.6%, at $24.42 an ounce, marking the third consecutive month of declines. The metal was little changed in March, trimmed by just $0.10. In February, silver shed $2.92. In January, it gained a modest $1.12.
Weighing on the white metal is record stock market rallies. In Q1, the Dow gained 11%, booking its best first quarter since 1998. The Standard & Poor’s 500 Index soared 10%, and the Nasdaq was up 8%. The Dow and the S&P have gone on to hit fresh records on numerous occasions, and the Nasdaq rests at its best level since 2000.
It looks as if the silver market has finally bottomed, as the tarnished price of silver recovered some of its luster over the last two weeks.
The big silver shorts have continued to exit their futures positions, yet there remain some elephants in the market — as evidenced by yesterday's non-economic volatility.
Furthermore, despite various perception related issues, the underlying case for holding physical silver remains as strong as ever, while public confidence in paper currencies trends ever lower.
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