Closing Gold & Silver Market Report – 5/11/2011

Geoffrey Varner

5/11/2011 4:32:00 PM

PRECIOUS METALS DOWN ON A STRONGER DOLLAR – When the dollar gains strength commodities such as gold and silver become more expensive to holders of other currencies.  This effect was seen today as the dollar gained against the euro. Some traders are predicting Greece’s default to be inevitable.  If that were to happen, Greece’s debt would have to be restructured.  In a restructuring, investors holding Greek debt will likely be offered less than face value for the bonds they hold. This possibility created the impetus to drag down the euro against the dollar.  The dollar, in turn, then gained against most major currencies.

Other international news affecting precious metals, Frank McGhee, the head dealer at Integrated Brokerage Service LLC in Chicago said, “There’s chatter about China raising rates to curb growth, and that’s made…silver vulnerable.”  China is a major consumer of silver and the second largest consumer of gold.  It is also noted, silver has a larger industrial application than gold and more than half of silver’s global output is consumed by the industrial sector.

There is still a place for precious metals in a volatile market.  "Gold is generally benefiting from the return of confidence from investors," said Darren Heathcote, head of trading at Investec Australia. "They are very happy buying on the dip, as we see the same old problems hanging around."  Those same old problems being the financial status of member EU countries, dollar woes, and inflation concerns closer to home.

At 4:15 PM (CT) the APMEX precious metals prices were:

• Gold price – $1,502.10 (down $16.30)
• Silver price – $35.15 (down $3.40)
• Platinum price – $1,780.60 (down $21.30)
• Palladium price - $719.00 (down $15.60)

Do not forget to secure your order of the 2011 America the Beautiful 2 coin set, Gettysburg & Glacier.