Ben Bernanke warned in a speech earlier today that failure to resolve the fiscal cliff would post a “substantial threat” to the U.S. economy.
Speaking at the Economic Club of New York, the Federal Reserve Chairman provided little in the way of new insights regarding the central bank’s stance on monetary policy. Instead, Bernanke urged lawmakers in Washington, D.C. to “protect the economy from the full brunt of the severe fiscal tightening at the beginning of next year that is built into current law.”
With regard to the impact that the Fed’s third round of quantitative easing (QE3) has had since being announced in mid-September on financial markets and the economy, Bernanke contended that it is “still too early to assess the full effects.”
As one might expect given the lack of substantive new information contained in Bernanke’s speech, the markets showed a muted response to the Chairman’s remarks.
The S&P 500 Index fell modestly soon after the Bernanke’s comments, but later rebounded to near unchanged at 1,386. Gold futures followed a similar trajectory, sliding to $1,722 before rounding to $1,727 per ounce, while silver held near the flatline at $33.15 per ounce.
(Visit GoldAlert Pro at http://pro.goldalert.com for gold price forecasts and analysis of the Fed’s impact on precious metals)
Gold and silver shares continued to lag the precious metals, however, as the Philadelphia Gold & Silver Index (XAU) traded down this afternoon by 1.0% at 168.90.
Notable XAU in the red included Coeur d’Alene Mines (CDE), Randgold Resources (GOLD), and Silver Wheaton (SLW). Shares of CDE slid by 2.0% to $23.21, GOLD by 1.3% to $105.40, and SLW by 1.7% to $36.27.
The full text of Bernanke’s speech is available at the Fed’s website:
http://www.federalreserve.gov/newsevents/speech/bernanke20121120a.htm
Fortuna Silver Mines Generates 30% Increase in Cash Flow
Fortuna also announced that at its San Jose mine in Mexico, the expansion of the processing plant to its design capacity and construction of an off-site dore plant in the coming year will contribute substantially to the Company’s profit margins. Furthermore, the Mines and Energy Ministry granted the construction permit for a new tailings facility at its Caylloma mine in Peru, now scheduled to be commissioned at the end of November 2012. Full Fortuna Silver Press Release
- Revenue of $43.84 million, a 35% increase over the prior year period
- Silver production of 1,027,741 million ounces, a 56% rise over Q3 2011
- Gold production of 5,348 ounces, 251% above the prior year period
- Cash cost per silver ounce, net of by-product credits, was US$4.81
