Los Angeles, CA – June Gold futures sold off sharply Tuesday afternoon and hit a new 4-month low of $1595.50 an ounce on key “outside markets”. A stronger U.S. dollar index as well as lower crude oil prices caused gold and silver to drop to near-term lows for 2012. Spot gold traded down $34.80 an ounce to $1604.25. July Comex silver also traded down $0.71 an ounce to $29.41.
Commodities fell across the board Tuesday as the U.S. Dollar Index gained on political news from the Euro Zone. Many market analysts said that Greece’s political turmoil and a leadership change in France triggered a sell-off trend in Wall Street stocks. Safe-haven investing was found in the U.S. Dollar and U.S. treasuries over the past five days. Despite the sharp drop, gold and silver are still in position to make large gains and are still up on the year. “I doubt we are in a bubble stage [with gold]” says doom and gloom economist Marc Farber. In addition, Americans still feel gold is the safest long-term investment out there, according to a recent survey conducted by Gallup consulting group. According to the survey, Gold beat out four other types of investments perceived as the best long-term choice out there, with 28 percent choosing it today.
With the recent elections in France and new political movement in Greece, the EU debt and financial crisis could be moving closer to one that could become very serious or at some point even a worldwide debt contagion. Typically, geo-political turbulence causes safe-haven investing in precious metals, especially gold. As the world watches on to see what will become of the Sovereign debt crisis in Europe, Many market analysts are suggesting to keep an extra close eye on U.S. Treasury bonds and notes futures prices, as they are a good daily gauge of the overall worldwide investor risk appetite, or lack thereof, in the market place.
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