Closing Gold & Silver Market Report - 05/08/2012

Brandi Brundidge

5/8/2012 4:41:00 PM

GOLD PRESSURED AS DOLLAR RALLIES  

The Gold price closed down, as concerns over the eurozone debt crisis led to heavy trading today. The change in French leadership and uncertainty in Greece put strong pressure on the euro. The growing concern is that Greece will fail to comply with the requirements of its bailout plan, and then whether Europe will then provide the billions of euros needed to prop up Greece. The drop in the euro rallied Treasuries in the United States along with the dollar, which pressured commodities including Precious Metals. “With stocks slumping and with Treasuries rallying and risks generally rising ... investors are withdrawing from the Gold market, perhaps as margin calls are made, forcing investors to liquidate precisely when they don’t want to,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

The broader stock and commodities markets also felt the effects of post-election Greece, with the Dow weathering a triple-digit drop at one point. The situation in Europe and slower growth in China are leading many to fear the global economy is slowing down. “We’re going to have higher tensions, more uncertainty and most likely a weaker euro,” said Mark McCormick, currency strategist at Brown Brothers Harriman.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold - $1,606.90 – Down $33.20.
• Silver - $29.48 – Down $0.68.
• Platinum - $1,511.90 – Down $19.20.
• Palladium - $620.30 – Down $28.60.

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