Closing Gold & Silver Market Report – 5/2/2011

Peter LaTona

5/2/2011 4:35:00 PM

BIN LADEN DEATH WILL NOT STABILIZE OIL PRICES -  Oil prices initially retreated on the news of bin Laden’s death, (as did gold), on the hopes this would promote stability in the Middle East. A panel of economists and asset managers meeting in Los Angeles today, expressed that it may cause even greater instability. Greater instability will lead to even higher oil prices (and possibly gold due to the positive correlation between these two assets). The panel agreed that it was a net gain for the US Military, but that does not mean it will be positive for the markets. “The fact that he’s gone doesn’t significantly change the geopolitical situation,” Roubini said. “I think the death of bin Laden doesn’t significantly change that.”

The market exuberance expressed on the announcement of bin Laden's death wore down and by the end of the day, almost all asset classes were trading down. The US stock market fell, the US dollar slipped even further, oil prices were down and so were precious metals.

At least one European Central Bank official is admitting that Greece may need to restructure their debt. Nout Wellink said on Monday that he is not willing to allow them to reduce their debt, but it may be necessary to allow them to extend their debt. He is the first euro official to admit to this possibility.

At 4PM (CT) the APMEX precious metal prices were:

• Gold price - $1,547.20 (down $10.70)
• Silver price - $44.01 (down $4.64)
• Platinum price -$1,864.00 (down $2.50)
• Palladium price - $775.50 (down $18.60)