Gold and Silver Prices Claw Higher
Source: The Street, Alix Steel (6/20/11)
"Gold and silver's safe haven status isn't a sure thing as uncertainty in Greece pushes the dollar higher."
Gold and silver prices were rallying Monday on safe haven buying as the U.S. dollar index gave up gains.
Gold for August delivery was adding $5 to $1,544.10 an ounce at the Comex division of the New York Mercantile Exchange. The gold price has traded as high as $1,548.20 and as low as $1,533.60, while the spot gold price was adding $3.30, according to Kitco's gold index.
Silver prices were adding $.15 to $35.90 an ounce. The U.S. dollar index was flat at $74.96, as the euro was slightly lower.
With no resolution to Greece's debt crisis, investors were buying gold and silver as protection against a worldwide, double-dip recession. Both metals were weaker in early-morning trading as a stronger dollar weighed on prices, but gold and silver quickly rallied as panicked investors needed some place to put their cash. U.S. stocks were modestly higher but still bouncing around some risky key support areas.
European Union finance ministers were unable to come to an agreement on another bailout package for Greece as well its next chunk of money from its first bailout. Officials were reportedly waiting for a €28 billion austerity bill to pass the Greek Parliament. The measure has been causing protests and strikes in Athens.
Gold and silver's safe haven status isn't a sure thing as uncertainty in Greece pushes the dollar higher versus the euro, a headwind for all dollar-priced commodities.
Gold and silver prices will also have to contend with the Federal Reserve's two-day FOMC meeting. Although no change in the interest rate is expected, gold will be reacting to how the Fed will exit its current $600 billion bond buying program and how it will deal with slow growth versus rising inflation.