Daily Market Report 05/31/12

GOLD
Fresh negative U.S. economic news added to the ongoing Euro-zone problems keeping Gold in a narrow trading range today. Gold showed excellent support at $1,551 per ounce today, while having resistance at $1,574 per ounce. Today’s negative U.S. economic announcement is leading to a fresh call for more quantitative easing (QE) by many economists. At 11am PDT, Gold is trading at $1,562.10 per ounce, down $1.40 per ounce.

Germany is Going for the Gold
Under a $3.5 billion stabilization plan being promoted in Germany as the European Redemption Pact, the heavily indebted Euro-zone states would use hard assets such as their Gold and currency reserves to back a new type of euro bond.

Gold has recently been moving in lockstep with the single currency, which fell to its lowest level against the dollar in nearly two years as investors continue to fret about Spain’s vulnerable fiscal conditions. "Continuous weakness in other currencies and strength in the dollar have kept Gold, precious metals and commodities generally depressed," said Jeremy Friesen, commodity strategist at Society General Bank in Hong Kong. Mr. Friesen stated that investors are waiting for central banks to respond with more monetary measures to help shore up the economies, which would help keep funding costs low and raise the inflationary outlook -- factors that will benefit Gold.

SILVER
Silver reached $27.47 per ounce earlier this morning before significant buying appeared to drive the price back above $28 per ounce. Right now at 11am PDT, Silver is trading at $27.81 down $0.22 per ounce.

New U.S. Economic Negative Data
The U.S. economy expanded at a 1.9% annual rate in the first quarter, slower than the 2.2% gain estimated a month ago, the Commerce Department reported today. An index that measures business conditions in the Chicago region fell in May to the lowest level since September 2009. The Chicago Business Barometer dropped 3.5 points to a seasonally adjusted 52.7 in May from 56.2 in April, according to the Chicago Purchasing Managers. The number of Americans who filed requests for jobless benefits climbed by 10,000 last week to 383,000, the highest level in five weeks, the U.S. Labor Department said today.