Gold makes minor gains off a lower dollar

In the Lead: “Taxing Matters”

The noble metals notched small gains only, with platinum adding $1 at $1,773 and palladium climbing $2 to $715 the ounce. Rhodium traded at $1,825 per ounce as of the latest price-check in New York. Investors in the platinum-group metals space who feared that the advent of electric vehicles might negatively impact the demand for such metals might be less nervous of late.

Despite the dazzling displays of plug-in cars by BMW and Renault at the Frankfurt motor show, it turns out that issues such as charging times and driving range are keeping consumers from readily embracing the future of the automobile just yet. Nissan expected to sell as many as 25.000 electric Leaf vehicles in the US in its first year out. It sold fewer than 6.200 of them through the month of August.

Most major market’ price movements appeared lackluster this morning, despite S&P’s overnight downgrade of Italian sovereign debt. Greece lived to see another default-free day despite a 100% level of betting positioning that expects it and the entire European Union (and currency) to go belly-up. Fitch’s Ratings cautioned the bond and euro vigilantes that, odds-wise, they might just be plain wrong. Overall, the trade appeared to have taken the customary wait-and-see attitude that prevails in and around Fed meeting time.

Thus, we might get a somewhat less fuzzy picture (despite intra-day possible rallies here) of where these markets might be headed next after tomorrow’s closing bell. In the interim, there is a modicum of optimism manifest in equities, based on the hopes that Greek debt talks and a possible stimulus of some type courtesy of the Fed could bring some much-needed stability to the markets and allow some better economic growth to take place.

Speaking of such growth, we can count the IMF out for the moment as signing on to such a (better than up to now) scenario. Newly-installed managing director Christine Lagarde said today that (albeit) “Overall, global growth is continuing” it is “slowing down.” Her institution now expects world economic output to rise by 4% this year as well as next.

While that is not a shabby number by any means, it is still substantially below the previously achieved 5.1% level the world experienced in 2010. As for the USA, the IMF now expects growth for the current year to come in a full percentage below the previously estimated 2.5% level. The IMF also praised President Obama’s recently-tendered jobs program and took quite a dovish stance on policies of tightening by central banks, given current economic realities. “Over to you, Mr. Bernake, then over to you, Mr. Obama.” The ball is in play, and being passed.

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