Gold is solidly above the $1,200 mark this morning, and silver is up over 3.5% as the dollar tumbles on disappointing retail sales in the U.S. gold is up nearly $18 an ounce at 10am in New York, after closing up $9.50 on Tuesday. Silver has broken above the $17 mark, while platinum is up over 1% and palladium gains a modest $3 an ounce.
Yesterday in the Markets
Wall St. pared most of its big losses in afternoon trading Tuesday, but still closed in the red. The bond curve continued to widen as investors dumped long-term debt (driving yields up) while at the same time fighting over short-term debt, which is in very short supply.
Oil posted solid gains yesterday, despite OPEC continuing to pump crude at near record rates. WTI closed up over the $60.50 mark, while Brent crude was over $66.60. The dollar lost ground against the euro, with the common currency gaining .63% to $1.12. Both of these developments were bullish for precious metals.
Factors Affecting Gold Today
U.S. retail sales were flat in April, against expectations of a .2% gain. Despite the worries over a consumer-driven economic that this posed, stocks opened higher on bargain hunting and speculation that anemic retail sales would stay the Fed’s hand and delay an increase in benchmark interest rates.
German Chancellor Angela Merkel is meeting increasing resistance within her party and the government over extending another bailout to a recalcitrant Greece, which refuses to abide by existing bailout terms. German taxpayers are fed up with seeing their money poured down a pit to support the Mediterranean welfare state.
EU officials belIeve at they contain any “contagion” if Greece abandons the common euro currency, which is probably necessary for it to inflate its way out of the mess it is in. Many think that Greece can remain in the EU while returning to the drachma. Several EU member nations,such as Sweden and Poland, still retain their own currency.
Markets will be greeted tomorrow by first-time jobless claims and producer prices in the U.S., both easily able to move the markets.