Gold, Silver Flirt with Gains
Source: The Street, Alix Steel (5/13/11)
"The U.S. dollar index was losing 0.12% to $75.10 as the euro recovered."
Gold and silver prices were recovering Friday as the U.S. dollar weakened.
Gold for June delivery was adding $2.70 to $1,509.50 at the Comex division of the New York Mercantile Exchange. The gold price Wednesday has traded as high as $1,516.40 and as low as $1,500.90. The spot gold price was up $2.40, according to Kitco's gold index.
Silver prices were adding $0.85 to $35.65 an ounce. The U.S. dollar index was losing 0.12% to $75.10 as the euro recovered slightly after getting slammed this week. Both the metals and currencies will take their cue today from the U.S. inflation reading, which is supposed to rise 0.4% in April.
The euro has slid 2.61% this week as worries abounded that Greece would need more bailout money and that extending the amount of time it has to pay back loans might not be enough to get the country back to any kind of fiscal health.
According to the European Union Commission, Greece's economy is expected to shrink 2.2% in 2011 versus a prior reading of 1% but it is estimated to grow 1.1% in 2012. Greece is reportedly looking at a budget deficit of 9.5% of GDP for 2011 versus the required 7.6%, which means more tightening and perhaps more reluctance by the EU to keep pumping money into the country.
The dollar is also gaining steam as the Federal Reserve's $600 billion bond buying program ends in June. Some experts think this will mark the end of so-called free money. Investors had been buying up gold and silver, which had run up 9.1% and 31.2% since the program was announced Nov. 3, 2010, as protection against a weak dollar, and could be abandoning those bets as the program comes to a close.