Gold plummets to 10-week low while silver falls nearly 2%

April 24, 2014

London (Apr 24)  Gold prices are lower and hit a 2.5-month low in early U.S. trading Thursday. More technical selling is featured, including sell stops being triggered as key chart support levels were breached on the downside. The gold bears remain in firm near-term technical command, which means the path of least resistance for prices remains sideways to lower. June gold was last down $13.30 at $1,271.50 an ounce. Spot gold was last quoted down $12.80 at $1,271.50. Spot Silver in concert with gold cascades nearly 2% to $19.12/oz.

In overnight news, European stock markets were supported by upbeat earnings reports coming from the U.S. late Wednesday, namely the technology sector and Facebook and Apple. Asian stock markets were mixed Thursday.

European Central Bank President Mario Draghi again hinted on Thursday the ECB could ease monetary policy to ward off deflationary price pressures. The annual inflation rate for the EU is 0.5%, whereas the ECB is aiming for an annual inflation rate of 2.0%.

In a sign the European Union is moving beyond its sovereign debt crisis, a Spain government bonds auction of several maturities fetched record low yields Thursday—ranging from just over 1% to just over 3%. Also, a report Thursday said the EU budget deficit fell below its target level for the first time since the EU debt crisis began in 2008.

The Russia-Ukraine crisis had de-escalated earlier this week. However tensions are rising again after Ukraine accused pro-Russian separatists of torturing Ukraine citizens and shooting at a Ukrainian jet. Russia has warned that any Ukraine military action against pro-Russian separatists would be akin to an attack on Russia. This situation is likely to flare up again, and likely sooner rather than later. Such would likely be bullish for safe-haven assets including the U.S. dollar, U.S. Treasuries and gold.

U.S. economic data due for release Thursday includes the weekly jobless claims report, the Kansas City Fed manufacturing survey, and durable goods orders.

Silver Phoenix Twitter                 Silver Phoenix on Facebook