Gold Prices Fall, Silver Tumbles 8% - 15 May 2011

Gold Prices Fall, Silver Tumbles 8% - 12 May 2011

GOLD PRICES rose almost $10 to $1526.50 in Asia on Wednesday, but then fell back off for most of the rest of trade in London and New York. Gold Prices ended near their early afternoon low of $1495.63 with a loss of 1.05%.
Euro Gold Prices remained at about €1056.
Silver Prices surged almost a Dollar to as high as $39.493 before falling back off. Silver Prices ended near their early afternoon low of $35.132 with a loss of 8%.
Gold Mining and silver equities fell throughout most of trade and ended with about 4% losses.
Platinum lost $19 to $1773.50, and copper dropped 9 cents to about $3.94.
Oil drifted lower after the Energy Information Administration reported that crude inventories rose 3.8 million barrels, gasoline inventories rose 1.3 million barrels, and distillates fell 800,000 barrels.
The US Dollar rose against major currencies, while the Euro fell on increased concerns over sovereign debt problems in Greece and Portugal.
US Treasuries remained higher after today’s $24 billion 10-year note auction sold at a high yield of 3.21% with a bid to cover of 3.00.
The Dow, Nasdaq, and S&P fell on poor earnings reports and a renewed downturn in commodities.
Among the big names making news in the market today were Disney, Toyota, HSBC, AIG, Macy’s, and Intel.
Thursday at 8:30am EST brings Initial Jobless Claims for 7 May, expected at 423,000, PPI for April expected at 0.5%, Core PPI expected at 0.2%, and Retail Sales for April expected at 0.6%. Excluding autos, sales are expected at 0.5%. At 10am is the Business Inventories report for March, expected at 0.9%.
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Chris Mullen, 12 May '11
Chris Mullen is chief content manager of the GoldSeek family of websites, a leading source of gold news, comment and mining-stock data for private and institutional investors

Gold Diversification Doubted As Commodity Slump Continues, Euro Falls On Appointment Of New ECB Chief - 15 May 2011

Gold Diversification Doubted As Commodity Slump Continues, Euro Falls On Appointment Of New ECB Chief - 12 May 2011

Spot Gold prices rose for the second day running in London on Tuesday, reclaiming half of last week's 7% drop from the all-time Dollar high as world stock markets rallied again with commodity prices.
The Euro Spot Gold Price surpassed last week's peak, trading at €34,028 per kilo after the Standard & Poor's ratings agency downgraded Greek sovereign debt to the same level as Belarus.
Tuesday morning's London Gold Fix was set less than 2% below late December's all-time Euro high.
"With the resurfacing of Eurozone sovereign debt concerns, we expect to see continued appetite for gold and silver," says Leon Westgate, London-based commodities strategist at Standard Bank.
"Given the recent sell-off, expect to see a return of investor as well as physical buying in search of value."
Short-term, the Greek downgrade "may provide a slight headwind for precious ****ls", according to one Spot Gold dealer in London. But longer-term, "the same factors behind the Euro slip also favor gold and silver."
An analyst from ratings agency Fitch told Reuters today that his agency is "actively reviewing" its rating for Greece.
Yields on Greek government debt fell slightly on Tuesday – down from 15.7% to 15.4% – as rumors circulated that Athens could receive another bailout.
Newspaper Kathimerini reported that the International Monetary Fund is lining up an aid package worth €80-100 billion, though it did not cite sources for the story.
Forecasting weak economic growth for years to come, the S&P ratings agency warns that Athens' creditors "could eventually" face 50% cut to their bondholdings "to restore Greece's debt burden to a sustainable level."
"Gold looks quite comfortable at $1500, and would profit from any escalation in concerns over Greece's debt sustainability," says Edel Tully, precious ****ls strategist at UBS in London.
However, "volumes are very light [in precious ****ls markets] and as such the potential for exaggerated price moves is quite high."
Giant gold holder the SPDR Gold Trust – a physically-backed exchange-traded fund (ETF) that tracks the gold price – saw shareholder sales cut its holdings of physical Gold Bullion to a one-year low on Monday.
Down at 1202 tonnes, the $60 billion trust has shed 9% of its physical bullion since the peak of June 2010.
"We have seen a couple of [ETF] outflows over the last few days and this might have dragged the Gold Price down a little," reckons Commerzbank analyst Daniel Briesemann.
"The decrease we've seen over the last week isn't related to anything specific on gold."
Meanwhile on Tuesday, latest figures showed that China's trade surplus was $11.4 billion in April, nearly four times bigger than analysts had forecast.
China's exports grew 29.9% year-on-year, while import growth was 21.8%.
"This number will likely add to the pressure from Washington for Beijing to allow faster currency appreciation," said Brian Jackson, Hong Kong-based senior strategist at Royal Bank of Canada.
"But more importantly [the data] should persuade Chinese policy-makers that a stronger yuan can be tolerated by the economy and is warranted as part of their efforts to curb price pressures."
Chinese vice premier Wang Qishan is currently in Washington D.C. for the annual Strategic and Economic Dialogue between China and the US, and the latest trade data "will likely provide a touch more ammunition for the US in the talks," believes Alistair Thornton, economist with HIS Global Insight in Beijing.
Now holding Dollar interest rates at zero for 25 months running, the US will instead "argue that more needs to be done with the [Chinese] currency and interest rates," says Thornton.
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Ben Traynor, 10 May '11
Editor of Gold News, the analysis and investment research site from world-leading gold ownership service BullionVault, Ben Traynor was formerly editor of the Fleet Street Letter, the UK's longest-running investment letter. A Cambridge economics graduate, he is a professional writer and editor with a specialist interest in monetary economics.
Please Note: All articles published here are to inform your thinking, not lead it. Only you can decide the best place for your money, and any decision you make will put your money at risk. Information or data included here may have already been overtaken by events – and must be verified elsewhere – should you choose to act on it. Please review our Terms & Conditions for accessing Gold News, RSS links are shown there.

Gold News until 14/05/2011

Gold News until 12/05/2011

12 May '11 — Gold Diversification Doubted As Commodity Slump Continues, Euro Falls On Appointment Of New ECB Chief Ben Traynor
12 May '11 — Gold Prices Fall, Silver Tumbles 8% Chris Mullen
11 May '11 — Price to Buy Gold Hits 1-Week High, Silver Regains 1/3rd of 30% Plunge, as Europe "Rearranges Deckchairs" on Titantic Greek Debt Ben Traynor
11 May '11 — Gold and Silver Prices Gain, US Dollar Closes Lower Chris Mullen
10 May '11 — Spot Gold Nears New Euro High as S&P Cuts Greece Again, Warns of 50% Bondholder Loss Ben Traynor
10 May '11 — Gold Holds Steady, Silver and Commodities Rebound Chris Mullen
09 May '11 — Gold Prices Rise in Euro as Rising Dollar Hits Commodity Rally, Silver Holds 26% Down Ben Traynor
07 May '11 — Gold Prices Drop 4.6% from Record Weekly Close, Crude Oil Loses 15%, Silver Drops 26% Chris Mullen
06 May '11 — Commodities "Panic" Subsides, Indians Rush to Buy Gold, Chinese Buy Silver on 31% "Dip" Adrian Ash
06 May '11 — Gold Hits $1477, Mining Stocks Lose 4% Chris Mullen
05 May '11 — Spot Gold Rallies, Silver Extends 24-Year Record Plunge, as Weak ECB and Bank of England Rates "Favor Precious ****ls" Adrian Ash
05 May '11 — Gold and Silver Prices Fall, Dollar Hits 3 Year Low Chris Mullen
04 May '11 — Silver Prices Sink into Bear Market, "Gold Favored" as Mexico Leads Central-Bank Accumulation Adrian Ash
04 May '11 — Gold Drops Slightly, Silver loses 2.9%, Mining Equities Fall Chris Mullen
03 May '11 — Gold Prices Hit New London High, Silver Drops 10.5% Ahead of Comex Margin Hike, "Frenzy" of Festive Indian Gold Buying Adrian Ash
28 Apr '11 — Case for Gold Investing "Remains the Same" as US Inflation Jump, Fed Sticks at Zero Adrian Ash
27 Apr '11 — Gold Up, Silver Down in "Subdued" London Trade as Dollar Falls Ahead of Fed Rate Announcement Adrian Ash
26 Apr '11 — Gold & Silver Investment Merely "Routine Speculation" at Record-High Prices as US & Irish Debt Quality Openly Challenged Adrian Ash
22 Apr '11 — Gold Ends Easter Week 1% Higher, Silver Jumps 8% Chris Mullen
21 Apr '11 — Gold Slips in Everything But Fast-Weakening Dollar, Physical Hoarding Accelerates as "Wall of Money" Needed by Govts & Banks Adrian Ash

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Gold History

Gold has been known and used by artisans since the Chalcolithic. Gold artifacts in the Balkans appear from the 4th millennium BC, such as that found in the Varna Necropolis. Gold artifacts such as the golden hats and the Nebra disk appeared in Central Europe from the 2nd millennium BC Bronze Age

Egyptian hieroglyphs from as early as 2600 BC describe gold, which king Tushratta of the Mitanni claimed was "more plentiful than dirt" in Egypt.[32] Egypt and especially Nubia had the resources to make them major gold-producing areas for much of history. The earliest known map is known as the Turin Papyrus Map and shows the plan of a gold mine in Nubia together with indications of the local geology. The primitive working methods are described by Strabo and included fire-setting. Large mines also were present across the Red Sea in what is now Saudi Arabia.
The legend of the golden fleece may refer to the use of fleeces to trap gold dust from placer deposits in the ancient world. Gold is mentioned frequently in the Old Testament, starting with Genesis 2:11 (at Havilah) and is included with the gifts of the magi in the first chapters of Matthew New Testament. The Book of Revelation 21:21 describes the city of New Jerusalem as having streets "made of pure gold, clear as crystal". The south-east corner of the Black Sea was famed for its gold. Exploitation is said to date from the time of Midas, and this gold was important in the establishment of what is probably the world's earliest coinage in Lydia around 610 BC.[33] From the 6th or 5th century BC, the Chu (state) circulated the Ying Yuan, one kind of square gold coin.

In Roman ****llurgy, new methods for extracting gold on a large scale were developed by introducing hydraulic mining methods, especially in Hispania from 25 BC onwards and in Dacia from 150 AD onwards. One of their largest mines was at Las Medulas in Le?n (Spain), where seven long aqueducts enabled them to sluice most of a large alluvial deposit. The mines at Ro?ia Montan? in Transylvania were also very large, and until very recently, still mined by opencast methods. They also exploited smaller deposits in Britain, such as placer and hard-rock deposits at Dolaucothi. The various methods they used are well described by Pliny the Elder in his encyclopedia Naturalis Historia written towards the end of the first century AD.

The Mali Empire in Africa was famed throughout the old world for its large amounts of gold. Mansa Musa, ruler of the empire (1312–1337) became famous throughout the old world for his great hajj to Mecca in 1324. When he passed through Cairo in July 1324, he was reportedly accompanied by a camel train that included thousands of people and nearly a hundred camels. He gave away so much gold that it depressed the price in Egypt for over a decade

The European exploration of the Americas was fueled in no small part by reports of the gold ornaments displayed in great profusion by Native American peoples, especially in Central America, Peru, Ecuador and Colombia. The Aztecs regarded gold as literally the product of the gods, calling it "god excrement" (teocuitlatl in Nahuatl).[36] Although the price of some platinum group ****ls can be much higher, gold has long been considered the most desirable of precious ****ls, and its value has been used as the standard for many currencies (known as the gold standard) in history. Gold has been used as a symbol for purity, value, royalty, and particularly roles that combine these properties. Gold as a sign of wealth and prestige was made fun of by Thomas More in his treatise Utopia. On that imaginary island, gold is so abundant that it is used to make chains for slaves, tableware and lavatory-seats. When ambassadors from other countries arrive, dressed in ostentatious gold jewels and badges, the Utopians mistake them for menial servants, paying homage instead to the most modestly dressed of their party.

There is an age-old tradition of biting gold to test its authenticity. Although this is certainly not a professional way of examining gold, the bite test should score the gold because gold is a soft ****l, as indicated by its score on the Mohs' scale of mineral hardness. The purer the gold the easier it should be to mark it. Painted lead can cheat this test because lead is softer than gold (and may invite a small risk of lead poisoning if sufficient lead is absorbed by the biting).

Gold in antiquity was relatively easy to obtain geologically; however, 75% of all gold ever produced has been extracted since 1910.[37] It has been estimated that all gold ever refined would form a single cube 20 m (66 ft) on a side (equivalent to 8000 m3).[37]

One main goal of the alchemists was to produce gold from other substances, such as lead — presumably by the interaction with a mythical substance called the philosopher's stone. Although they never succeeded in this attempt, the alchemists promoted an interest in what can be done with substances, and this laid a foundation for today's chemistry. Their symbol for gold was the circle with a point at its center (?), which was also the astrological symbol and the ancient Chinese character for the Sun. For modern creation of artificial gold by neutron capture, see gold synthesis.

During the 19th century, gold rushes occurred whenever large gold deposits were discovered. The first documented discovery of gold in the United States was at the Reed Gold Mine near Georgeville, North Carolina in 1803.[38] The first major gold strike in the United States occurred in a small north Georgia town called Dahlonega.[39] Further gold rushes occurred in California, Colorado, the Black Hills, Otago, Australia, Witwatersrand, and the Klondike.

Because of its historically high value, much of the gold mined throughout history is still in circulation in one form or another