Precious Metals prices moved noticeably higher in early morning trading as the dollar weakened against the euro on news of a European plan to lower eurozone member nations’ borrowing costs. Economist Vishnu Varathan said, “It still falls short of a concrete solution, but the removal of severe pessimism over what’s going to come out of the EU summit is driving markets higher.” Meanwhile, the news has led analyst Lynette Tan to offer a positive year end outlook for Gold. She said, “In the long run, we’re still bullish on Gold.  It’s still likely to hit last year’s high of $1,920. The global economy is not doing well, and we expect safe haven demand to be back for Gold.”

Eurozone leaders came together and hammered out a surprising compromise plan to help member nations. There are still issues to be worked out, but going from “no hope” to at least a road map of a plan on which everyone agrees has been a boost to global markets. The biggest shock of all was Germany’s agreement to a majority of the provisions. Banker Holger Schmieding said, “The  summit result offers no ‘silver bullet’ to solve the euro crisis once and for all. … It is another attempt to buy some extra time for the underlying fiscal repair and structural reforms to show results. All in all, there is some progress.” However, strategist Charles Diebel stated what many investors are probably thinking: “It is one step on a very long road. But we don’t have any details, and arguably the detail is where the risk lies, because the market will start to pick holes in it, as we’ve seen previously.”

At 9:03 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,598.50, Up $46.60.
• Silver, $27.73, Up $1.38.

Most commodities, including Precious Metals and oil, ended the day with lower prices.  Prices were pushed down by a stronger American dollar and fears of a continued lack of resolution to the eurozone crisis. Oil ended the day at the lowest price in eight months as it closed below $80 per barrel. Dan Flynn, a trader at Price Futures Group in Chicago, when interviewed by Bloomberg News, said, “We’re not getting a lot of good news with the economy.”

Part of the reason for the drop in prices is the  summit among European leaders, who are desperately trying to stop the bleeding from Europe’s wounded economy. “The mood is one part hope, one part trepidation, and one part fear that there will be a lack of resolution at this latest meeting, which is probably a fair (to optimistic) assessment,” wrote Matt Smith, analyst with Summit Energy.

The American economy is on shaky ground, a statement that should surprise no one, but was particularly well outlined in a recent Reuters article. According to analysis of first quarter GDP growth, more than half of the growth of GDP in the first quarter came from pent up demand from the automobile sector, demand that since has waned. Data show that GDP growth in the first quarter, excluding this demand from the auto industry, was a measly 0.7 percent. This looks particularly worrisome when compared to the GDP growth of the fourth quarter of 2011, a relatively robust 3 percent. “It highlights that the U.S. is not immune from the weakness in the rest of the world. Corporate profits are likely to remain under pressure, a development that is unlikely to help the employment outlook,” said Jeremy Lawson, a senior economist at BNP Paribas in New York. This decline in auto demand correlates with the price decline for Platinum and Palladium, which are key ingredients in automobile components.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,554.30, Down $25.60.
• Silver, $26.37, Down $0.70.

Precious Metals prices were weathering the blows of investors concerns over the eurozone debt crisis. Concerns ahead of the European Union summit have influenced investors and world markets. The Indian rupee continues to struggle, which has curbed the primarily Gold investing nation’s normal buying activity. Analyst Robin Bahr said, “There’s no semblance of a safe haven at the moment, but  as the price goes lower, that bid does come back  as you maybe get some renewed investor interest -- sovereign wealth funds and central banks looking to nibble away, and even some physical buying.”

Concerns over Germany’s economic issues mount, as executive and consumer sentiment fell from 90.5 in May to 89.9 (the lowest for Germany since late 2009) and unemployment rose. The issue is that core member nations, not just secondary nations, are now affected by the growing debt crisis. Economist Christoph Weil said, “Germany won’t be able to disconnect from the euro region developments. … The second quarter will show an economic contraction, and there are no signs of improvement for the following three months. Whether the situation stabilizes afterward hinges decisively on the euro crisis, and the latest developments are no real reason for optimism.”

Pressure continues to build for German Chancellor Angela Merkel within the European Union as she continues to be attacked on all sides from nations that find her intransigence irritating. Merkel is also feeling global pressure. The issue is that as unpopular as her beliefs are in the EU, they are quite popular with the German people.  Billionaire George Soros said he believes her position is a bit myopic. He said, “Merkel has realized that the euro is not working, but she cannot change the narrative she has created because that narrative has caught the imagination of the German public, and the German public has accepted it.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,570.10, Down $9.90.
• Silver, $26.96, Down $0.11.

Better than expected economic data boosted American stocks while Gold remained flat during trading today. As Matthew Kaufler of Federated Clover Advisors explains, “The housing data came in better than expected  and we got good news on durable goods orders, so we’re having a relief rally that the economy is showing signs of relative strength and not weakening as some had feared.”

Investors are still waiting for tomorrow’s European summit to start before they make any decisions, it seems. Carlos Perez-Santalla of PVM Futures said, “The primary focus now seems to be the dreaded potential deflationary pressures (but) deflation would be more believable if the European economy were more stable.” Perez-Santalla also said that  further easing in the eurozone will be necessary. Money printing methods have historically been very supportive of the Gold price.

At 5:15 p.m. (EDT), the APMEX precious metals spot prices were:

• Gold, $1,576.10, Down $0.30.
• Silver, $26.98, Down $0.18.

Precious Metals are trading lower this morning,  thanks to investors moving to the sidelines  ahead of the European Union summit, which starts tomorrow. Michael Turner of RBC Capital Markets said, “This could be a reasonably long holding pattern until the headlines start to flow from the European Council’s heads of state summit tomorrow.” The wait-and-see approach has currencies like the U.S.A. dollar and the euro trading mostly flat.

While summer is not likely to hold any big moves by policymakers in the U.S.A., Europe or China, Deutsche Bank analyst Daniel Brebner believes  one thing could support gold. “I think we’ll continue to see very steady buying by central banks, which have been in the market for the last couple of quarters or so. That should help gold prices from weakening,” he said.

European leaders aren’t exactly agreeable ahead of the summit. German Chancellor Angela Merkel, in response to euro bonds being a potential solution to the debt crisis, said that  she doesn’t expect that to happen in her lifetime. With borrowing costs in Italy and Spain reaching dangerous levels, the leaders of those countries are calling for assistance, but Merkel wasn’t keen on that idea either. Spanish Prime Minister Mariano Rajoy said, “The most urgent issue is the one of financing. We can’t keep funding ourselves for a long time at the prices we’re currently funding ourselves.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,567.30, Down $9.10.
• Silver, $26.80, Down $0.36.

Stocks rose slightly today, as economic data and headlines cast a glimmer of hope onto trading floors. Home prices rose slightly, according to the Case-Schiller index that measures home values in 20 major cities across the United States. However,  optimism is still mixed with copious amounts of doubt, as described by Keith Wirtz, who oversees $15 billion as chief investment officer for Fifth Third Asset Management: “There are lots of variables at play. … People are looking at signs of stabilization in the housing market there’s the European summit this week it’s almost quarter end. It’s going to be a volatile week.”

Mixed with the good news about the housing market was a  drop in consumer confidence  to the lowest level in five months, indicating that consumers are getting jittery about the job market and their investments. According to a report by the Investment Company Institute, mutual funds saw cash outflows top $620 million, meaning investors withdrew at-risk money to invest in safer assets such as bonds and Gold. The same report showed inflows of $3.6 billion into bond funds, demonstrating investors’ search for a safe haven.

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,574.40, Down $15.50.
• Silver, $27.13, Down $0.52.

Precious Metals prices have been fairly volatile on eurozone debt fears and the escalation of violence and rhetoric involving Syria. Analyst Robin Bhar said, “Gold is capped on the upside by disappointment post-Fed, while on the downside,  we have some bargain hunting, and a bit of physical buying into the troughs. … We are stuck in a fairly small range here, in the $1,570 to $1,600 area, certainly until the weekend, when we will get to hear more on how the eurozone will be (tackled).”

The eurozone debt issues continue to escalate after the announcement of a  fifth eurozone nation applying for aid. Although Cyprus, the fifth nation seeking aid, is a much smaller “hit,” the combined effect of rising Italian and Spanish yields, Greek resolution, and monetary bailout has European leadership at a crucial crossroads. A summit has been put together to overcome some hurdles the European Union is now facing. Basically the whole of Europe is interested in a single treasury and the euro bond, except Germany. But Germany is, at this point, the only truly solvent nation and facing its own issues in being the benchmark, as production and consumer sentiment in Germany has slid over the last couple of months. Chairman Jim O’Neill said, “The euro crisis is in some ways mind bogglingly simple to solve ... because it isn’t economics, it’s politics. … If (German Chancellor) Angela Merkel and her colleagues stood there together with the rest of the euro area … and if they behaved as a true union, this crisis would be finished this weekend.”

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,579.80, Down $9.10.
• Silver, $27.30, Down $0.33.

The price of Gold has moved higher as the safe haven appeal of the yellow metal returns on continued weariness over the eurozone debt crisis.  Cyprus has become the fifth eurozone country to ask for assistance from Europe. The Cypriot government said in a statement, “The purpose of the required assistance is to contain the risks to the Cypriot economy, notably those arising from the negative spillover effects through its financial sector, due to its large exposure to the Greek economy.”

Goldman Sachs strategist Jim O’Neil is more concerned with the United States economy than Europe’s due to America’s fragile condition that seems to be off track. O’Neil said, “Europe doesn’t run the world. The second half of the year, unless Europe completely implodes, I’m still in the camp that the markets recover, particularly the U.S. and some of the big (emerging markets), and we could still conceivably see new highs,” he said. “So we shouldn’t get solely focused on the European stuff.”

Gasoline prices are slowly falling, which in turn is positive for the economy to an extent. Credit Suisse economist Jonathan Basile said, “It’s like a stabilizer in the economy, but you also don’t want to see gasoline prices falling persistently, because that will tell you there’s got to be something else fundamentally wrong in the global picture. Gasoline prices are the most visible prices in the economy. People see it. … It’s very easy to see lower prices. That’s the good news. But you have to put it into the context of what’s going on.”

At 5 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,585.30, Up $17.90.
• Silver, $27.57, Up $0.80.

Uncertainty in Europe has led to American stock futures falling and Precious Metals prices remaining flat. A two-day  European Union summit meeting is set  for later this week, but Peter Boockvar of Miller Tabak said that “nothing of substance will come” of the meeting.  He said Germany is “just not giving in to the requests for largesse that the rest of Europe wants them to disperse in the form of socializing debt obligations in the euro region.”

After informally making the request last weekend,  Spain has formally requested aid from the eurozone. Olli Rehn, the EU’s top economic official, said aid could arrive in a matter of weeks, adding, “The policy conditionality of the financial assistance … will be focused on specific reforms targeting the financial sector, including restructuring plans which must fully comply with EU state aid rules.”

Gold  seems to be in a holding pattern  at the moment. Macquarie analyst Hayden Atkins said, “The broader picture suggests Gold could move a bit lower, but it will stay in this range until we see definitively whether the bulls will be right about the printing presses at central banks ramping up again, or whether they will hold fire until the world gets a lot worse. It is in a wait and see kind of mode,” suggesting that increases in the Gold price are likely, and that it’s just a matter of ‘when’ and not ‘if.’

At 9:26 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,573.90, Up $6.50.
• Silver, $26.85, Up $0.08.