Uncertainty.  We are in the middle of one story after another that makes an investor wonder which side is up. JPMorgan reported $2.2 billion in losses. Chesapeake Energy continues to get hammered after questionable acts by its chief executive. No wonder we live in a time of  lacking trust.  David Darst, chief strategist at Morgan Stanley, spoke of this investor lack of confidence in the stock market when he said, “They have lost faith and trust in politics, and they have lost faith and trust in the political powers in Washington.” Jeremy Siegel, a Wharton finance professor, cannot understand why people are running to 10-year government bonds when the guaranteed low yield guarantees a loss in purchasing power. It makes no sense that United States Treasuries are considered a safe haven. It might make no sense that Gold and Silver prices are going down.

Why is Gold and Silver down? The same old story. The euro looks so bad that the Unites States dollar looks good. U.S. Sen. Tom Coburn of Oklahoma, speaking on CNBC, called the American dollar the least wilted flower in the vase. No one can know for certain where the price of Gold or Silver might go. But looking at the past, it seems  uncertainty  is often very fertile ground.

Have a great weekend!

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

• Gold - $1,581.80 – Down $15.20.
• Silver - $28.94 – Down – $0.30.

Good news for Gold prices  surfaced when a survey conducted by Bloomberg showed that 14 of 32 analysts anticipate prices to gain next week. The Gold price is currently being affected by the political uproar in Europe, which is pushing the euro down, and positive American economic news, which is strengthening the dollar. “When the market gets very nervous, then they buy dollars, and Gold finds it difficult to rally,” said Jesper Dannesboe, an analyst at Societe Generale SA in London. “Given what’s going on in the markets at the moment, any rally will probably just be a bounce before another setback.”

The prediction is that when the Federal Reserve meets again in June, there will be an announcement about further monetary easing. Bill Gross, who runs PIMCO’s Total Return Fund, wrote Thursday on Twitter, “A decision to buy more debt is getting closer.” Gross was referring to the Federal Reserve possibly purchasing additional bonds to counter a sluggish United States economy. Jan Hatzius at Goldman Sachs Group Inc. said, “In such an uncertain environment, taking out a bit more insurance still looks like the sensible choice for American monetary policy-makers.  We have stuck with our forecast of some additional monetary easing,” referring to the Fed’s policy meeting June 19 and 20.

China’s economy appears to show an unexpected slowdown  in output data for April, with lower retail sales and easing prices. Both industrial output and fixed asset investment growth fell below their lowest points in some time. Alistair Thornton, an economist with IHS Global Insight in Beijing, believes a structured plan should be developed to promote growth for the economy. Thornton said, “The government has attempted to revive the economy through largely passive means, but that strategy appears to be failing. A more assertive monetary policy is now needed.”

At 1 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold - $1,588.00 – Down $9.00.
• Silver - $29.08 – Down $0.16.

Precious Metals were looking to close the day mixed, with Gold snapping a three-day losing streak. Easing concerns over the Spanish debt market and Greece securing funds needed for bond payments strengthened the euro. Hopes of more American monetary easing are fading after a run of positive economic data. “Gold has behaved closer to risky assets rather than differentiating itself as a safe-haven asset and has been winded by the possibility of further  quantitative easing being scaled back,” said Suki Cooper at Barclays Capital.

At a fund-raiser in Seattle, President Barack Obama said that Europe’s economic difficulties are partly because Europe did not take many of the steps the United States did. “We’ve still got headwinds. Europe is still … in a difficult state, partly because they didn’t take some of the  decisive steps that we took early on in this recession,” Obama said at the event. “Gas prices are still pinching a lot of folks. The housing market is still very weak across the country. But the good news is that we have weathered the storm,” he said.

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

• Gold - $1,594.70 – Down $0.50.
• Silver - $29.10 – Down $0.19.

Precious Metals remained relatively steady through the morning. The strength of the United States dollar continues to affect prices, as well as the lingering eurozone debt crisis. Sharps Pixley’s Ross Norman said, “At this particular moment, Gold is telling us the economic crisis in Europe has had a seismic shift. The fact that Gold has collapsed is not surprising. It’s  adhering to its relationship with the U.S. dollar. What happens with these seismic shocks is that (Gold) doesn’t do the safe-haven thing it does the dollar thing.” In a note to investors, RBS wrote, “The safe-haven trade is still in the backseat, and Gold remains positively correlated with risk assets and pressured by a strong U.S. dollar.”

Greece is looking at yet another election in the next few weeks as governmental consensus is not taking place. The head of Greece’s Radical Left Coalition, Alexi Tsipras, was not able to form a unity government this week, opening the door for the new elections. The issue is not about not getting a unity government formed, it’s the fact that  Tsipras is viewed as the next prime minister, so his beliefs are significant. In Greece, the austerity measures are known as “the memorandum” which Tsipras opposes. He expressed his views recently when he said, “I fully disagree with what is at heart of the memorandum. … Further austerity will make us a Third World country in the EU.”

Spanish banks are taking a cue from Ireland as concerns are mounting that  bank losses are not being accounted for properly. Spain is trying to avoid outside assistance, in the form of a bailout, but many analysts have concerns that Spain will not be able to avoid a bailout. London-based analyst Patrick Lee said, “How can you only talk about one type of real estate lending when more and more loans are going bad everywhere in the economy? Ireland managed to turn its situation around after recognizing losses much more aggressively and thus needed a bailout. I don’t see how Spain can do it without outside support.”

At 1:01 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold - $1,597.00 – Up $1.80.
• Silver - $29.29 – Even.

Gold and Silver prices had recovered from early morning losses, and were hovering close to Wednesday’s closing marks. A slew of data were released this morning. In the United States,  jobless claim numbers were slightly above expected levels  after revisions to last week’s marks. Also, theU.S.A. trade deficit widened by 14.1 percent  in March, with exports again falling well short of imports. American stock futures gave up early gains on the news.

The main factor in the Precious Metals price dip has been the American dollar and its relationship to the euro, which has been bombarded with bad news out of Greece, Spain, Germany and France over the past week. Although there still is caution regarding Greece,  investors are cautiously optimistic about Spain, which helped the euro take back some ground against the dollar. That country took over one of its biggest banks so as to ease anxiety.

News out of China also troubled many investors,  as imports and exports were both down in April. Jiang Chao of Guotai Junan Securities said, “We had expected China’s export growth to reach a trough by the end of the second quarter, but now I think we will have to revise down our trade forecast for the full year.”

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

• Gold – $1,593.30 – Down $1.90.
• Silver - $29.23 – Down $0.06.

BOOST TO AMERICAN DOLLAR ADDS TO ECONOMIC IMPROVEMENT     

As the value of the American dollar continued to climb today on Europe’s fiscal worries, it pushed the Gold price down for the day. Silver fell to its lowest price since January. Frank Lesh at FuturePath Trading said, “Currency markets tend to rule in commodities, and  right now the dollar is king.” The dollar has been boosted by the eurozone debt crisis. Lesh added, “Dollar strength is trumping any safety qualities of Gold at the moment.”

As mentioned in the  Mid-Day Gold & Silver Market Report, the two key factors driving metal prices down come from the global effect of the economic and political issues that recently have surfaced, and the dollar has strengthened to a point that many investors are not accustomed to. And with a more powerful dollar, some observers have speculated that the  Federal Reserve could alter its current policy to hold interest rates low  until 2014. Narayana Kocherlakota, president of the Minneapolis Fed, said the next step may be to raise interest rates in response to a healthier economy ahead. “I would say in six to nine months, we should begin to be thinking about initiating our exit strategy,” Kocherlakota said. 

Many of us do not realize the amount of Precious Metals we are holding in the palms of our hands on a day to day basis with our electronic devices. Todd Willis at Redlan Metals, a Precious Metals refinery, shared how recycling your old cell phone, air cards, cell phone chargers, SIM cards, and lithium ion batteries is an environmentally safe and sound way to dispose of unused items. Willis said,  “We look for Gold, Silver, Palladium and copper in cell phones scraps.  … We return those metals back to the commodity markets. The key is you have to have enough volume in order for it to be economically feasible to go through the recovery process.”

At 5:02 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold - $1,590.70 - Down $14.80.
• Silver - $29.25 - Down $0.25.

The Precious Metals markets continued their downward trend today. The decrease in prices can be linked to two key factors. First, the economic and political issues around the globe have played a major role. Secondly, the United States dollar has risen in value to a point not seen since 2008.  However, there are other factors being ignored that point to a bright future.  Analysts with Sharps Pixley say Gold investors are “overreacting to bad news and ignoring good news,” such as more physical demand from India and a large increased demand in China.

There are many factors that point to the Federal Reserve using another round of monetary easing.  A lackluster Labor Department report showed the weakest gains in the past six months. Europe’s financial issues are slowing the global economy. Also, the 10-year Treasury yields have fallen to almost record lows. Jan Hatzius at Goldman Sachs Group said, “In such an uncertain environment, taking out a bit more insurance still looks like the sensible choice for U.S. monetary policymakers.” When past rounds of monetary easing were conducted, the effect on the Precious Metals markets was positive.

The European economic crisis has been well-documented over the past few weeks. Looking at the situation, the United States has a chance to learn from the eurozone’s mistakes.  The main reason is the difference between reacting and being proactive.  Any time there are fiscal policies being changed overnight, it will have a major effect on everyone involved. “We shouldn’t be complacent. Our fiscal adjustment can be more gradual, but you have to start now,” said Simon Johnson, former chief economist for the International Monetary Fund.

At 1:05 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold - $1592.50 - Down $13.00.
• Silver - $29.17 - Down $0.33.

Precious Metals prices were down in overnight and morning trading. Gold in particular is falling due to the immediacy of the European debt crisis. Between changes in leadership, ultimatums and downgrades, the euro again is on shaky ground. Nic Brown of Natixis said, “It’s not as though the escalation of the political risk in Europe is doing anything positive for Gold prices at all, and this is totally different to how we were between 2008 and 2010, when all the correlations were totally reversed and the weakening of the euro actually led to a strengthening in the Gold price.” David Govett of Marex-Spectron said, “Long term, events will catch up with other markets, and the dollar will lose its temporary safe-haven status, and at that point,  Gold will start to shine again.” The overall outlook remains positive for Gold.

Greek politicians are  not likely to join the coalition government  considering the main competition is denouncing the European Union/International Monetary Fund bailout. Alexis Tsipras’s party came in second in a vote over the weekend, and he has been tasked with trying to form a majority party. However, with the mandate to denounce the bailout, the likelihood of another election in a few weeks is looking more certain. Nikos Papas, Tsipras’s political office head, said, “He will say that the signatures of (conservative leader Antonis) Samaras and (socialist leader Evangelos) Venizelos committing to the program represent only 32 percent of voters and are not binding the Greek people to the program anymore.” In response, Samaras said, “Mr. Tsipras asked me to put my signature to the destruction of Greece. I will not do this. The country cannot afford to play with fire.”

Moody’s is set to start cutting credit ratings for more than 100 global banks. These cuts follow the S& P and Fitch downgrades from last year. The cuts could have a detrimental effect on banks being able to raise funds and their ability to offer loans. Philippe Bodereau said, “I’d like to say the views of the rating agencies don’t matter anymore, but unfortunately they do.  This is a setback for the banks, particularly when you consider how much progress they have made in making themselves safer and more transparent.”

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

• Gold - $1,587.20 – Down $18.30.
• Silver - $28.93 – Down $0.57.

The Gold price closed down, as concerns over the eurozone debt crisis led to heavy trading today. The change in French leadership and uncertainty in Greece put strong pressure on the euro. The growing concern is that Greece will fail to comply with the requirements of its bailout plan, and then whether Europe will then provide the billions of euros needed to prop up Greece. The drop in the euro rallied Treasuries in the United States along with the dollar, which pressured commodities including Precious Metals. “With stocks slumping and with Treasuries rallying and risks generally rising ... investors are withdrawing from the Gold market, perhaps as margin calls are made, forcing investors to  liquidate precisely when they don’t want to,” said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co.

The broader stock and commodities markets also felt the effects of post-election Greece, with the Dow weathering a triple-digit drop at one point. The situation in Europe and slower growth in China are leading many to fear the global economy is slowing down. “We’re going to have higher tensions, more uncertainty  and most likely a weaker euro,” said Mark McCormick, currency strategist at Brown Brothers Harriman.

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

• Gold - $1,606.90 – Down $33.20.
• Silver - $29.48 – Down $0.68.

Precious Metals prices have been down throughout the morning trading session, largely on technical selling and the growing European Union debt crisis. The euro is trading at its lowest levels since January. The uncertainty has led to a rise in strength of the United States dollar. Daniel Smith of Standard Chartered said, “What we’ve seen in recent weeks is rallies have been increasingly weaker on the upside, and that is a warning that we are going to see another test on the downside. … Gold didn’t benefit from the latest European problems, and part of that is the U.S., which has been outperforming relatively speaking, so that is handing the dollar strength.” The  Chinese demand for Gold remains highfrom the physical perspective.

Greece has stepped right back into the breach and concerns are mounting again after Alexis Tsipras, who is in charge of forming a new majority party, said that in order to be a part of the coalition, members must renounce previously agreed to austerity measures. “The bailout parties no longer have a majorityin parliament to vote for measures that plunder the country,” Tsipras told reporters in Athens today after receiving the coalition-building mandate from President Karolos Papoulias. “There will be no 11 billion euros ($14 billion) of additional austerity measures 150,000 jobs will not be cut.”

At 1:30 p.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold - $1,605.70 – Down $34.50.
• Silver - $29.49 – Down $0.67.