Gold and silver were showing smallish gains Tuesday amid reports of weaker U.S. retail sales and low inflation, a eurozone on the brink of recession and an increasingly likely Greek exit from the euro.
Spot gold was up 0.1%, bid at $1,558.10 an ounce as of 10:40 a.m. Spot gold was barely holding above the $1,560 level, trading as high as $1,565.70 and as low as $1,549.30, according to Kitco market data. The London afternoon reference price was set at $1,556.50, down $2 an ounce from Monday’s afternoon reference price.
Spot silver was showing a 0.14% gain, bid at $28.22 an ounce. The morning high as of time of writing was $28.56, with the high as of time of writing reaching $28.56 and the low was $27.89. Tuesday’s reference price was set at $28.28 an ounce, five cents an ounce below Monday’s price fix.
U.S. retail sales rose only slightly in April, edging up 0.1% following stronger-than-normal gains in the first three months of 2012, the Commerce Department reported. The New York Fed reported that its Empire State index of general business conditions jumped to 17.9 in May from 6.56 in April. The Labor Department reported that the April Consumer Price Index (CPI) was unchanged following a 0.3% rise in March.
Greek political leaders’ last-ditch effort to agree on a coalition government failed today, which means a second national election will have to be held, probably in mid-June. Political disunity and widespread discontent with austerity measures imposed by the EU now put the odds in favor of Greece exiting the euro, a possibility that Greek and EU leaders have said would not happen.
Unexpectedly strong German Q1 GDP growth of 0.5% saved the eurozone as a whole from sliding into a second recession in three years. Eurostat reported that Q1 eurozone GDP was unchanged. Seven of the 17 eurozone countries are now in recession.
Political turmoil over austerity measures in Spain as well as Greece drove up the prices of German bunds as bond buyers are selling out of weaker eurozone-periphery countries for the relative safety of German bonds.
Gold bullion prices dropped below $1,550 an ounce in London morning trading Tuesday for the first time since December, with a drop of 7% this month so far, BullionVault reported.
“The bear channel support had been at $1,581,” BullionVault quoted Scotia Mocatta technical analysts.
“The next target is a full retracement to December’s low of $1,522, and there does not appear to be much standing in the way.”
Gold and silver trusts were showing morning losses on U.S. stock exchanges.
Gold and silver mining ETFs also were continuing their losing ways.
The Market Vectors Gold Miners ETF (NYSE:GDX) was losses of around 0.8%.
The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was down some 1.25%.
The Global X Silver Miners ETF (NYSE:SIL) was down nearly 0.6%.
Gold mining shares were showing losses across the board.
Agnico-Eagle Mines (NYSE:AEM) was down around 1.55%.
Barrick Gold (NYSE:ABX) was slightly lower, down around 1.15%.
Eldorado Gold (NYSE:EGO) was down nearly 1.2%.
Goldcorp (NYSE:GG) was down around 0.4%.
Kinross Gold Corp. USA (NYSE:KGC) was down around 1.15%.
Newmont Mining (NYSE:NEM) was showing losses of around 0.9%.
NovaGold Resources (NYSEAMEX:NG) was down around 0.4%.
Yamana Gold (USA) (NYSE:AUY) was down more than 0.5%.
Silver mining shares were showing morning losses as well Tuesday, Hecla Mining the exception.
Coeur d’Alene Mines (NYSE:CDE) was down some 1.2%.
Hecla Mining (NYSE:HL) was nearly 0.8% higher.
Pan American Silver (NASDAQ:PAAS) was showing losses of around 1.5%.
Silver Wheaton (NYSE:SLW) was down around 0.5%.
Silver Standard Resources (NASDAQ:SSRI) was down some 1.5%.
As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.