Mid-Day Gold & Silver Market Report – 5/10/2011

Stephanie Chandler

5/10/2011 12:01:00 PM

GOLD AND SILVER ADVANCE ON EURO TROUBLES

Precious metals are advancing on the news that Standard and Poor downgraded Greece’s credit rating yesterday for the fourth time since April 2010, saying that even further reductions are possible. Another reduction would make Greece the lowest-rated nation in Europe. Andrey Kryuchenkov, an analyst at VTB Capital in London says in a report to clients, “Economic uncertainties in the monetary union and fears over peripheral debt were returning to the focus yet again…in the short run, bullion is likely to remain well supported, also helped by physical activity picking up in Asia amid seasonal demand.”

Andrey Kryuchenkov is not the only one who believes in the safe-haven of precious metals. Analysts at ScotiaMoccatta said in a report, “Given the regional issues still facing the global economy, which include sovereign debt, massive budget deficits, raised geopolitical unrest, currency debasement and inflation, gold is likely to remain sought after by a wide range of investors.” Due to all of this uncertainty the managing director for cross-commodity trading at Deutsche Bank AG, Hal Lehr, believes that gold may reach $2,000 by January.

On a different note, the Fed holds to their claim that they will not need to extend the QE2 past its scheduled end next month as they feel there are signs of recovery in the economy.

At 8 AM (CT) the APMEX precious metals prices were:

• Gold price – $1,517.70 (up $13.00)
• Silver price – $38.50 (up $1.31)
• Platinum price – $1,801.00 (up $4.90)
• Palladium price - $733.50 (up $2.50)