Closing Gold & Silver market Report – 6/5/2014

Ted Prince

6/5/2014 4:04:00 PM

ECB STIMULUS, RATE CUT BOOSTS GOLD AND STOCKS

The Gold price rose for the first time in over a week as European Central Bank’s (ECB) President, Mario Draghi, announced that deposit rates for the region will be cut to 0.1 percent in an effort to combat deflation.  “The market is trained to react every time a major central bank makes a big announcement just as the Pavlovian theory states,” Michael Gayed, the chief investment strategist at Pension Partners LLC, said. “Today’s move may be temporary as the market remains lackluster and is caught in a range, waiting for a catalyst that could be instrumental in the breakout.”  Gold and Silver investors are hoping today’s mild bump will be the first step in a prolonged rebound following last week’s dip.  As individuals await the release of non-farm payroll data on Friday, combined with the historically sluggish summer trading cycle currently in effect, it is little surprise that bullion’s 60-day trading volatility is at its lowest in over a year. 

U.S. stocks have surged to new record levels today as the ECB announcement boosted optimism regarding the global economy.  “Mario Draghi is taking a sledgehammer to the disinflationary environment in the eurozone,” Chad Morganlander, a fund manager at Stifel Nicolaus & Co., said. “His actions are well beyond expectations.”  The eurozone will also undertake its own asset purchase program in an effort to extend liquidity to struggling sectors of the region’s economy.  Investors will await tomorrow’s critical jobs report to see if today’s rally can be stretched through tomorrow and into next week. 

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

• Gold, $1,255.70, Up $9.40.
• Silver, $19.08, Up $0.23.
• Platinum, $1,448.50, Up $13.60.
• Palladium, $839.80, Up $2.60.

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