Closing Gold & Silver Market Report – 5/17/2011

PLATINUM AND PALLADIUM TRADE HIGHER ON NEWS OF SHORTAGES – In a report by Johnson Matthey, platinum and palladium supplies will be much lower this year.  Both are very industrial metals used in the auto industry.  The auto industry has been an increasing source of demand, and should be a 10-year peak this year.  Meanwhile, on the supply side, Russia’s output is predicted to be much lower.  Simple laws of supply and demand indicate that these forces may drive prices higher.

U.S. treasuries rose on the news of the housing market’s unexpected decline and the lack of production in the industrial markets which pushed the 10-year notes to this year’s lowest. The 10-year U.S. treasury notes dropped four basis points today in New York, the lowest level since Dec. 7, and the 30-year bond yields also dropped, bringing it to 4.22%, over 5 basis points lower.

Fixed income strategist at Miller Tabak Roberts Securities LLC in New York, Adrian Miller, comments on the decline, “Slowing economic data, the ebb and flow of the European debt crisis, and general anxiety about the budget battle have kept enough bullish momentum in Treasuries to continue to see yields grind lower.”

At 4PM (CT) the APMEX precious metal prices were:

• Gold price - $1,488.20 (down $3.90)
• Silver price - $34.01 (down 21 cents)
• Platinum price - $1,769.30 (up $8.30)
• Palladium price - $725.70 (up $8.20)