Precious Metals prices have recovered yesterday’s losses, thanks to a weaker U.S. dollar and  physical demand continuing to stay strong. Sharps Pixley said in a note, “Given the reduction of tail-risk in Europe, the rising labour market in the U.S. and the low inflation rate, investors prefer equities to Gold in the near term,” though many investors still like the portfolio balance Precious Metals offer.

U.S. stock futures are pointing to a  higher open on Wall Street, continuing their record run. Surprisingly, New York University economics professor Nouriel Roubini, known as “Dr. Doom,” does not believe that stocks are in a bubble, but did warn of a major selloff. Roubini believes there is a “huge gap between sentiment on Wall Street and the main street,” and noted that a still-weak U.S. economy could lead to a “huge rally in risk assets” such as Gold.

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

• Gold, $1,469.00, Up $17.70.
• Silver, $24.02, Up $0.13.

The Gold price dropped today on news out of Europe regarding formation of a banking union. This has caused a belief that there will be less financial risk in the region,  which has in turn caused a drop in safe haven assets such as Gold. “Any indication that Europe is working towards a resolution is bad for Gold,” Adam Klopfenstein, a senior market strategist at Archer Financial Services Inc. in Chicago, said in a telephone interview. “Money is flowing into riskier assets like equities.”

In the United States, a new consumer confidence report does not give a positive outlook for the country’s economic situation. “You look at the stock market and we’re expecting to have record earnings this year, companies have record cash on their balance sheet … but we still have 24 million people who are unemployed or underemployed in this country … [The public is] starting to understand  we are not in the middle of a dynamic recovery, we’re in the middle of a 2% or 2.5% recovery, which is not very strong,” said Terry Jones, associate editor at IBD.

At 5:03 pm (EDT), the APMEX precious metals spot prices were:

• Gold, $1454.10, Down $16.40.
• Silver, $24.01, Down $0.04.

Precious Metals prices fell in overnight trading as Gold faces a key technical resistance level at $1,469.80 per ounce.    A surprise rate cut in Australia  put more pressure on the Gold price, as morning losses doubled after the news.  Credit Suisse analyst Karim Cherif said, “The monetary easing news will continue to support liquidity, favoring more cyclical assets like stocks rather than defensive ones like Precious Metals.” A dealer in Hong Kong added, “Physical supply is still a bit tight. The world is happy to buy Gold, especially when prices were below $1,400. But Gold is reluctant to go above $1,475 because of the (exchange-traded funds).”

Andy Xie of MarketWatch believes that with growth stuck at about a two percent range and inflation seemingly rising in the future, the U.S. is in a period of stagflation. Xie wrote, “Despite its recent setback,Gold remains a big beneficiary of the current macro environment. It could make a new high in the current year and rise much higher in 2014. The Gold bull market will end when an inflation crisis pushes central bankers around the world to tighten aggressively… For the masses, Gold is the best inflation hedge.”

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

• Gold, $1,453.90, Down $16.60.
• Silver, $23.65, Down $0.40.

Friday’s jobs report strengthened the U.S. dollar and put pressure on Gold, but the Precious Metal rebounded in overnight trading even though European markets are closed for a national holiday. Saxo Bank Vice President Ole Hansen said, “Technically we are in a nice upward channel since the mid April low.” He also noted that outflows from bullion backed exchange traded products have slowed.

U.S. stocks traded flat this morning, but the question remains, can the record highs keep coming? Eighty percent of S& P companies have reported earnings, but with no data today, investors have time to ponder the longevity of recent gains. IG Chief Market Strategist Chris Weston said, “With new all-time highs in the CAC, DAX and S& P 500,  it seems like equities have regained their luster  and the fact that so many are skeptical keeps us bullish on these markets, and from a technical perspective shorting is tough and unrewarding.” He also said don’t bet against the markets right now.

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

• Gold, $1,472.60, Up $6.00.
• Silver, $24.05, Down 0.05.

The European Central Bank (ECB) cut its main interest rate down to 0.5 percent. This highly anticipated move has had little effect on the European stock market and the value of the euro however, the Gold market is moving upward on the news.  “The ECB's decision to cut interest rates to 0.5 percent had looked ever more inevitable as latest data and survey evidence pointed to ongoing and widespread economic weakness across the eurozone as well as below target and receding inflation,” Howard Archer of IHS Global Insight said after the decision. 

Announcements from the central banks of the U.S. and the eurozone caused the Gold price to show improvement,  but not to the level some would believe is warranted.  “The logic was that the more [quantitative easing] was done by central banks the more inflationary pressure we would have, but there's no sign of that and Gold is suffering,” Societe Generale analyst Robin Bhar said. The next key report investors are eyeing is the U.S. jobs report on Friday. If the report is disappointing, it will support the idea behind the long-term use of monetary easing in the U.S. by the Federal Reserve. 

At 9:00 am (EDT), the APMEX precious metals spot prices were:

• Gold, $1466.20, Up $17.50.
• Silver, $24.01, Up $0.58.