Morning Gold & Silver Market Report – May2,2011
Peter LaTona
5/2/2011 8:14:00 AM
MARKET IMPACTS OF OSAMA bin LADEN’s DEATH - The news that US forces killed Osama bin Laden in Pakistan is still being digested and analyzed worldwide. Let’s take a look at some immediate effects on the markets. Osama bin Laden was a threat to Middle Eastern oil fields. If this threat is now gone, these fields would be more secure. More security equates to less risk and therefore the price of oil is retreating this morning, down around $2.
US stock futures and the US dollar immediately began to rise on the news. There has been a pull back prior to the opening bell, so investors will watch to see if this is sustainable or merely exuberance. Gold prices fell $16 to the negative last night on the news of bin Laden’s death. It since rebounded all the way back to a positive $1.00 before falling slightly in early morning trading. Platinum and palladium fell sharply as well on the news, but both have rebounded sharply.
Silver had a tumultuous weekend, even before the bin Laden announcement. Silver prices for July delivery dropped as much as 13% to $42.20 before moving up above $45. The CME Group did announce they are raising margins on silver futures contracts, but this is not viewed as significant enough news to move the market so sharply. There are no reports that can explain this drop in silver and subsequent recovery. Perhaps it can be chalked up to the volatility of the silver market.
As often happens with historical events, there are more questions than answers, as to what this holds for the future.Dennis Gartman, publisher of the Gartman letter, said today that you always have to be careful as to what you wish for. There is nothing short of revolutions going on in the Middle East and North Africa, and we cannot be certain if we have reduced risk, or created even more risk by making bin Laden a martyr in the Arab world.
At 8AM (CT) the APMEX precious metal prices were:
- Gold price - $1,557.60 (down 30 cents)
- Silver price - $45.61 (down $3.04)
- Platinum price -$1,869.10 (up $2.60)
- Palladium price - $789.40 (down $4.80)
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
