Gold & Silver Digest: 6/7/13
The Gold & Silver Digest contains headlines of stories that members of this group deem relevant and/or interesting to precious metals enthusiasts.
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6/07/13 10:01 PM EST US close metals price quotes from Finviz
Gold fell around 2 percent on Friday, its biggest one-day drop in over three weeks, as funds dumped bullion after resilient U.S. jobs data suggested the Federal Reserve could begin to scale back its monetary
stimulus later this year.
The metal posted its first weekly drop in two weeks after Friday's selloff more than erased gains earlier this week. A sharp dollar drop and strong physical demand had lifted gold above $1,400 an ounce for most of this week. For the week, bullion eased 0.3 percent.
In the nursery tale, Goldilocks is a vulnerable child, but in financial markets Goldilocks is a powerful force and on Friday she abruptly reversed the gold comeback.
The May U.S. jobs report that was released on Friday indicated a kind of perfect environment for stocks, reflecting an economy that is marching ahead at a measured pace and less likely to provoke the Federal Reserve into making any sudden and drastic moves. It was disastrous for the yellow metal, which slumped by more than 2% on Friday, falling back down to $1,382 an ounce. Gold has now dropped by 15% since late March when the gold sell-off started in earnest.
Gold traders are the most bullish since before the bear market began two months ago after a retreat in equities from an almost five-year high and a weakening dollar spurred demand for bullion.
Nineteen analysts surveyed by Bloomberg expect prices to rise next week, with eight bearish and six neutral, the largest proportion of bulls since March 22. Global stocks that rose to the highest since June 2008 on May 22 reached a six-week low yesterday amid mounting speculation about whether the Federal Reserve will taper stimulus. The U.S. Dollar Index, a measure against six currencies, slipped to the lowest in three months.
Gene Arensberg of the Got Gold Report calls attention to CNBC's report of a burst of seemingly "mysterious" gold futures contract dumping that took place today a fraction of a second before publication of the U.S. government's employment report. CNBC finds the dumping suspicious in the sense of possible leaking of the employment report. But of course GATA is inclined to suspect that there was no leaking at all and that the gold contract dumping was done by the government itself through its bullion bank agents so that the employment report might be perceived by the markets as the government would like it to be perceived, favorably. Arensberg's preface and his link to the CNBC report are posted at the Got Gold Report's Internet site here:
Jesse's Café Américain: Max Keiser and Alasdair Macleod On the Physical Gold Market
The quadrillion pound gorilla of silver’s return as a monetary currency is now lurking patiently in the room as the bond market seems to be recovering somewhat.
Nevertheless, perhaps central banks are simply testing the resilience of the bond market by tempting the bond vigilantes out of hiding? Still, one has to remember that there is no strong willed Volker around at the Fed with the guts to raise interest rates to fight inflationary pressures.
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