Closing Gold & Silver Market Report – 5/27/2014

Peter LaTona

5/27/2014 4:12:00 PM

GOLD PRICES FALL 2 PERCENT ON STOCK MARKET RALLY

Gold had its sharpest one day decline since December, falling 2 percent, while the S&P 500 climbed to an all-time high. Several factors were in play today to generate this decline. There was a technical sell off driven by a breakout from pennant pattern, called so because of its triangular shape, which triggered computer generated sales. The S&P rally was another significant factor, rising on unexpected good economic news in the housing market and durable goods.

Despite three-dollar gas and a continuous rise in grocery prices, more is mentioned about deflationary pressures than inflationary pressures. Many economists are now expecting inflation to begin building to a point where even the Federal Reserve cannot deny. In the next three months, we could begin to see price increases in areas other than food and gasoline that have been under control since the Fed began its low interest rates policies. "For headline inflation, pipeline food prices have been soaring, and while there has already been significant pass-through to the consumer level in recent months, there is likely more to come," Morgan Stanley economist Ted Wieseman said in a recent note to clients.

At 5:15 p.m. (ET), the APMEX Precious Metals spot prices were:

• Gold, $1,265.90, Down $28.00.
• Silver, $19.10, Down $0.37.
• Platinum, $1,468.30, Down $5.50.
• Palladium, $835.50, Up $3.10.

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