Reverse Gold Recovery,2

BULLION MORNING – Precious metals rise on weak dollar, US slow economic recovery

London 06/06/2011 – Precious metals edged higher in Europe on Monday, with gold nearing one-month highs above $1,550 and palladium hitting a multi-week peak, on a feeble dollar and expectations the Federal Reserve will keep supplying liquidity to the market.

Volumes remained thin, however, due to the absence of Chinese players for the Dragon Boat holiday.

Spot gold rose to a session high of $1,548.40 per ounce at one stage, within reach of a one-month high of $1,550.50 hit on Wednesday. It was last at $1,544.10/1,544.90 per ounce, up $3.00. On the charts, the metal could attempt to challenge resistance at $1,549 and then $1,551, while a close above $1,554 should increase chances of reaching the all-time high of $1,575.40 hit on May 2.

“(After) weak US employment numbers the euro targets $1.471 and $1.489 in the shorter term, helping gold which itself has targets up to $1,585,” a trader said.

The dollar hovered just below a one-month trough of 1.4659 reached earlier against the euro, while European shares tracked Wall Street lower, as investors dumped riskier assets after weak labour data confirmed the economic recovery in the world’s biggest economy is slower than previously thought.

The single currency, which has hit repeated highs over the past few weeks, was boosted by progress over Greece’s debt financing – the EU and IMF have disclosed a new bailout package, which would replace a previous 110 billion euro aid plan agreed last year.

The euro was also helped by expectations that the European Central Bank policy meeting on Thursday could signal a rise in interest rates in July, which would lead to a likely widening of rate differentials, as speculation rose last week that policymakers in the US could decide to keep rates at zero until 2012.

“Weak US economic data last week are strengthening expectations that the Federal Reserve will maintain key interest rates at the current very low level for even longer, which will keep the opportunity costs for precious metals low,” broker Commerzbank said.

In other news, “the tension on the Israel-Syria border is likely to help gold, independently of currency moves,” the trader added.

Gold profits from geo-political troubles, as these heighten interest in safe-haven assets like precious metals.

Among other precious metals, palladium rose $6.50 to a fresh best since May 3 at $789.50 per ounce at one stage, before settling at $784/789 per ounce, still up $1. Platinum was unchanged at $1,815/1,825 per ounce,

Elsewhere, silver reversed last week’s losses and rose 39 cents to $36.63/36.70 per ounce.

“Silver prices are up this morning as silver capitalises on concerns over the economic outlook and investors look to alternative value stores,” analyst John Meyer at Fairfax said.

The metal fell nearly nine percent last week after a series of bad figures from the US eroded its industrial attributes. Meanwhile, a fall in investment interest was also noted in the world’s largest exchange-traded funds (ETFs) over the past few weeks.

www.newbridgealliance.com

About the Author

Newbridge Alliance, Inc.

2161 Palm Beach Lakes Blvd, Suite 310 West Palm Beach, FL 33409

(866) 750-5588

Paul Watson: Fed Leads America “To The Brink Of Collapse” – Alex Jones Tv 2/3