Los Angeles CA, May 19 (Tangible Investments) - by James O'Dell - Gold and Silver prices retreated moderately on profit taking Tuesday morning, after advancing $1.40 or 0..11 percent to close at $1,225.90 an ounce on Monday following a fifth straight day of gains that have come amid a raft of recent weaker than expected economic data. The price of Silver rose $0.17 or 0.97 percent to close at $17.73 an ounce, while the Gold/Silver ratio fell to 69.14.
Alex Thorndike of MKS, says that it was a stronger dollar overnight that prevented prices from breaking back above the $1,230 an ounce level, while adding that the greenback continues to dominant in the marketplace. "One gets the sense that if we see a prolonged rise in the dollar emerge again (similar to Jan-March this year) the metal will run into significant headwinds - particularly in an environment of diminished physical demand," said Thorndike.
The Gold price hit a three month high of $1,232.41 an ounce on Monday, then slipped in afterhours trading as the dollar rebounded, and investors turned their focus to the Greek debt crisis and the Wednesday release of the Fed minutes from the April policy meeting for trading cues.
Greek Finance Minister Yanis Varoufakis said on Tuesday that he expects an accord to be struck with the nation's troika of creditors within the next week. Greece remains at loggerheads with the European Union (EU) and International Monetary Fund (IMF) over economic reforms that must be adopted before the creditors will release the final 7.2 billion euro tranche of the country's 240 billion euro bailout, which has been withheld since August.
The Greek government remains at the very brink of defaulting on its obligations, and is due to make a payment of 1.5 billion euros to the IMF on June 5th. Mr Varoufakis continues to deny that the country might leave the euro zone, adding instead that "Another currency is not on our radar."
HSBC’s James Steel says that during any crisis “Gold is one of the best things you can possibly have.” Steel then cautions, however, that “if you buy it during a crisis, you’ll generally be too late. So, you’ve really got to hold it in advance.”
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