Morning Gold & Silver Market Report – 5/7/2012
GREEK, FRENCH ELECTIONS SEND EURO, GOLD LOWER
Precious Metals prices were lower, along with stocks, around the globe. The dollar was up, thanks to investors fleeing the euro in search of safety. Weekend elections in the eurozone have many investors concerned. Elections in Greece and France showed a lack of acceptance of needed austerity measures designed to keep countries financially solvent. Steen Jakobsen, chief economist at Saxo Bank, said, “This shows that politics is getting out of control in Europe, (and) the gap between politicians and voters is widening. That’s what you see in Greece; that’s what you see in France.”
In Greece, the combination of parties that structured the recent bailout are now short of a majority in the parliament. Carl Weinberg of High Frequency Economics wrote, “This is the crisis we have all feared,” referring to the shift in power. The euro now sits at its lowest level in three months after this “worst-case scenario” in Greece.
With the recent dip in the Gold price, many money managers have increased holdings in Gold to the highest level in a month. Barclays Capital reported, “Gold remains locked in a range, and our view is unchanged. … A move above the $1,690 area would confirm our bullish view toward the range highs near $1,800. Seasonality leads us to expect a mid-year sideways chop before we become more bullish in the second half of the year.”
At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:
- Gold - $1,638.90 – Down $7.30.
- Silver - $30.21 – Down $0.25.
- Platinum - $1,528.70 – Down $8.30.
- Palladium - $653.20 – Up $0.10.
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