|Greenspan Calls Gold Insurance And Long Term Protection |
Los Angeles CA, (Tangible Investments) - by James O'Dell - Gold and Silver prices edged higher in early trading, with Gold up 0.16 percent to $1,258.90 an ounce after advancing $7.60 or 0.61 percent on Friday to end the week at $1,256.90 an ounce.
The price of Silver is up 0.33 percent to $18.39 an ounce after gaining $0.19 or 1.05 percent on Friday to finish the week at $18.33 an ounce, while the Gold/Silver ratio fell to 68.57. Platinum is up 1.17 percent to $1,039.00 an ounce and Palladium is up 1.95 percent to $785.00.
The week began with markets in the U.S. closed in observance of the Presidents Day holiday. Gold rallied sharply in early trading on Tuesday following the release of the flash manufacturing Purchasing Managers' Index (PMI) which fell to 54.3 in February, well below expectations of 55.4, vs 55.0 in January.
The PMI is an indicator of the economic health of the manufacturing sector. A stronger dollar and the growing belief of an imminent rate hike pressured the precious metals early on, but the PMI miss gave Gold new life and it ended the day slightly positive.
Former Fed Chair Alan Greenspan shared his views on Gold with the World Gold Council (WGC) for its “Gold Investor,” winter edition. "Significant increases in inflation will ultimately increase the price of Gold,” said Greenspan. “Investment in Gold now is insurance. It’s not for short-term gain, but for long-term protection.”
Gold rallied to a three-month high on Thursday as the dollar weakened after comments made earlier in the day by Treasury Secretary Steven Mnuchin, on CNBC. "The dollar's backed off, bond yields have backed off, and that's given a bit of support for Gold," said Societe Generale's Robin Bhar.
The precious metals reacted quickly after Secretary Mnuchin said that it could take until the end of 2018 before the U.S. sees “sustainable growth of 3 percent or more.”
Mnuchin believes that the new tax overhaul proposal is the best path to 3 percent growth and said that he expects Congress to pass “very significant” tax reforms before its recesses in August.
Mnuchin's comments "...signaling a delay until August of the much-vaunted tax reform package, gave Gold bulls the uncertainty green light they needed to take the yellow metal higher," said Jeffrey Halley, a senior market analyst at OANDA. Richard Perry, of Hantec Markets, said that Gold's recent moves have opened up more upside for the yellow metal.
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