Morning Gold & Silver Market Report – 5/20/2011
BAD ECONOMIC DATA = FED CONTINUING ULTRA-LOOSE POLICY?
Gold and silver recovered quickly from early-morning losses, with gold eclipsing $1,500 and silver looking to hold over $35. Prices are being supported by the dollar continuing its slide versus the euro. Stocks are slightly lower this morning as investors are waiting to see more about the strength of the U.S. economy. The uneasy economic data released this week is adding to speculation that the Federal Reserve will stay the course of ultra-loose monetary policy. Matthew Turner of Mitsubishi Corp explains, “Gold doesn’t pay interest, so by comparison with other asset classes, it does better in lower interest rate environments.” This boosts the safe-haven appeal of gold. Adds Turner, “A close about $1,500 an ounce [today] helps set a positive tone for next week.” Fund manager Dennis Gartman sees that gold has refused to break this week, and he believes “it appears in the process of breaking out to the upside instead.”
Economic uncertainty also continues in Europe, as Spanish youth vow to continue protests against unemployment and politics. Tens of thousands of youth have been protesting in the main squares of cities in Spain for five days. There is an election this weekend, and the electoral board ruled in favor of a ban on protests tomorrow. The Prime Minister of Spain has said he may not enforce such a ban, however. Spain has long been considered the possible breaking point in the euro zone if a bailout is needed for their economic woes.
At 8:05 AM (CT) the APMEX precious metals spot prices were:
- Gold - $1,504.20 (up $10.30 on the day)
- Silver - $35.31 (up $0.29)
- Platinum - $1,770.00 (even)
- Palladium - $737.00 (up $4.90)