Mid-Day Gold & Silver Market Report – 6/2/2014

Peter LaTona

6/2/2014 11:56:00 AM

GOLD HITS FOUR-MONTH LOW - SILVER SLIGHTLY TO THE UPSIDE

Gold and Silver prices remained stuck in neutral during the morning trading hours. Gold is slightly down, while Silver slightly to the upside. Stock markets in the U.S. and Europe are up. The S & P continues to set new records despite low volumes and European stocks received a boost from a rebound in Chinese manufacturing data. The same factors are in play as the previous week. The perceptions that Ukraine tensions are easing and the economy is improving are bearish for gold. "(Stocks and gold) are negatively correlated because as the global economic situation stabilizes and improves, people have a higher risk appetite and want to enter more risk investments," Natixis analyst Bernard Dahdah said. "When you see stock markets rallying, you can potentially see people dropping out of gold into equities."

French economist Thomas Piketty, author of “Capital in the Twenty-First Century” said in a CNBC interview today that there has been too much reliance on the Federal Reserve to jump start the economy and not enough fiscal policy. Piketty stated that the Fed actions were a raw deal for the 99 percent and a great deal for the 1 percent. "Those who are gaining from all this printing of money are not the people that you'd like to gain," Piketty said. "You certainly need to ask more of these top income groups who got between two-thirds and three-quarters of aggregate income growth over the past 30 years in this country. "If the growth performance of the U.S. economy had been exceptional, you know, 4 percent growth rate, 5 percent growth rate, then it would be OK. Everybody would get something. [However,] if you have relatively mediocre growth performance … and three-quarters of [the wealth] gets to the top, it's not a good deal for the middle class and the rest of the population."

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

• Gold, $1,246.10, Down $1.90.
• Silver, $18.82, Up $0.08.
• Platinum, $1,438.30, Down $15.40.
• Palladium, $832.70, Down $3.60.

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