Daily Gold & Silver Market Report – 5/19/2015
Lorrie Freeman
5/19/2015 12:14:00 PM
Gold Snaps ON RISING DOLLAR; “Twilight Zone Stocks”
Gold’s rise ended Tuesday morning as the dollar increased sharply against the euro. European shares also gained after the European Central Bank suggested it may increase its 1 trillion euro ($1.12 trillion) bond-buying program. U.S. 10 year bond yields and uncertainty ahead of the latest Federal Reserve meeting minutes, due Wednesday, weighed on Gold’s outlook as well. Gold does not pay interest, so the rise in returns from U.S. bonds is seen as a negative for Gold because of the increased opportunity cost. “Once again we have not really managed to get a foothold above $1,225 [per ounce]. We broke above it, but we didn’t really get any follow through, and the fact that we are seeing weakness after a few good sessions does not bode well,” Saxo Bank senior manager Ole Hansen said. “Near term, from a retracement perspective, $1,208 and $1,200 are the two levels to look at.”
Stocks have entered a “twilight zone,” marked by volatility, “flash crashes” and moderate returns until the economy improves enough for a Federal Reserve interest rate hike, according to Bank of America Merrill Lynch strategists. A transitional period for investors is expected while the markets sort out their differences. BofA Merrill Lynch’s chief investment strategist Michael Hartnett said there is potential the market will behave the way it did in 1987 and 1998, “where you’ve got basically a very sharp midcycle correction rather than the onset of a bear market. It certainly can’t be dismissed,” Hartnett said, noting there are “quite vicious price movements in foreign exchange, fixed income, and commodities. I don’t think equities should be an exception.”
At 1:13 p.m. (ET), the APMEX Precious Metals spot prices were:
- Gold, $1,209.50 Down $20.80
- Silver, $17.12 Down $0.68
- Platinum, $1,151.80 Down $27.70
- Palladium, $777.10 Down $17.90
APMEX Market Reports provide our readers with a review of spot price activity and some of the factors that may be affecting the market for Precious Metals. While the information is obtained from sources we believe to be reliable, we do not guarantee its accuracy or its completeness and we encourage you to conduct your own investigation prior to making any decision based on the information. The Market Reports are not intended as a comprehensive discussion and there may be other factors affecting the financial marketplace. These Market Reports are provided for informational purposes only and do not constitute a recommendation by APMEX to hold, purchase or sell any Precious Metal product. All orders, purchases and sales, if any, are subject to the terms of the User Agreement and other applicable policies
