Gold Hit 3.5 Month Low as USD Stronger

Gold prices are solidly lower and dropped to a 3.5-month low in morning U.S. trading Tuesday. Negative-looking charts and bearish “outside markets”—a higher U.S. dollar index early this week and sharply lower crude oil prices Monday—are keeping the sellers in control of both gold and silver markets. As U.S. trading gets under way the U.S. dollar index has pushed to a four-week high. Silver prices fell to a seven-month low in early U.S. trading Tuesday. August Comex gold was last down $15.90 at $1,157.30 an ounce. September Comex silver was last down $0.543 at $15.21 an ounce.

Negotiations between Greece and the EU/IMF are continuing Tuesday at an EU summit, despite the Sunday Greece “no” vote on new austerity measures. Markets’ reactions to the “no” vote and the increasing likelihood Greece will exit the European Monetary System have not been extreme, so far. However, there is still some modest anxiety in the market place. European stock markets were weaker Tuesday, awaiting the outcome of the EU summit. U.S. stock indexes are firmer in early U.S. pre-market trading. The Euro currency is trading lower. The U.S. dollar index and U.S. Treasuries are higher on safe-haven buying.

Some European market watchers say the Greece matter and the “end-game” could become clearer by the end of this week. However, the market place has heard that kind of talk literally for years, and the problems with European sovereign debt continue to surface. While the gold market has gotten little to no lift from this latest EU debt crisis, it’s my bias that the safe-haven metal will benefit in the coming months or even years from the EU debt crisis and the potential for another worldwide financial market contagion.

via Kitco

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