old prices are modestly lower in early U.S. trading Friday. A firmer U.S. dollar index that hit a six-week high overnight is limiting buying interest in the yellow metal. June Comex gold was last down $3.50 at $1,291.60 an ounce. Spot gold was last quoted down $3.10 at $1,291.00. July Comex silver last traded down $0.13 at $19.39 an ounce.
It would not be surprising to see some keener risk aversion creep into the market place as trading session progresses Friday. It’s a long, three-day holiday weekend in the U.S and U.K. The European Union sees parliamentary election results during the weekend. There is concern in the EU about anti-EU candidates making a strong showing, which in turn has helped to push EU periphery countries’ bond yields higher recently. And the Russia-Ukraine territorial crisis, while presently on a low simmer, could see the heat turned up this weekend. The Ukraine holds a presidential election on Sunday. I would not want to be short gold, the U.S. Treasuries or the U.S. dollar heading into this extra uncertain weekend.
In overnight news, the German Ifo business confidence index missed market expectations, which helped to push the Euro currency still lower. The Ifo index for May came in at 110.4 versus 111.2 in April. Germany is by far the European Union’s largest economy. This report adds still more weight to notions the European Central Bank will move to further ease its monetary policy at its regular meeting in early June.
Credit rating agencies Moody’s and Standard & Poors have raised their ratings on the sovereign debt of Spain and Greece. The EU debt markets showed little reaction, with yields still elevated due to higher concern regarding the economic health of the bloc.