Mid-Day Gold & Silver Market Report, 05/31/2012

Brandi Brundidge

5/31/2012 12:15:00 PM

BULLISH INVESTORS WAITING FOR GOLD TRIGGER  

Gold has moved off its morning gains today, as another sharp drop in the euro’s value has investors looking to the United States dollar.  Issues with the Spanish banking system, a spike in Italian borrowing expense, and the upcoming Greek elections have fanned the flight to the safety of the dollar. But American economic data is starting to disappoint, with increases in new jobless claims and a sharp drop in the Midwest business activity index, which could open the door to a new round of easing. “If we had momentum upwards, there are still plenty of people who are bullish and who would buy into that. But at the moment, you have pressure from a strong dollar, or perhaps more accurately a weak euro, and people are just a little bit wary. That doesn’t alter the fact that there are plenty of bulls out there. They are waiting for a trigger to send the price higher. And the question is, what’s that trigger?” said David Jollie at Mitsui Precious Metals.

Today’s drop in U.S.A. stocks has the Dow Jones industrial average on pace to finish May with a loss, which would be its first loss in the past eight months. Worries over the European Union and its economies added to troubling employment numbers. “It’s the summer months, unfortunately, so that’s one strike. And everyone is out hunting for black swans and finding them. It’s a strange environment where investors just don’t trust the market at all, so the question is how cheap do stocks have to get before they can entice investors again,” said Jack Ablin, chief investment officer at Harris Private Bank in Chicago.

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,569.10, Up $3.90.
• Silver, $28.10, Up $0.03.
• Platinum, $1,420.80, Up $17.60.
• Palladium, $613.00, Up $7.30.

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