Gold News & Info

Source: Dr. Bill Musgrave, American Gold Exchange

Austin— Gold slid 0.8% and the dollar strengthened as the Organisation for Economic Co-operation and Development (OECD) forecast that the eurozone economy would shrink this year. The dollar was also boosted by Fitch's downgrading of Japan's sovereign rating by two steps to A+, its fifth-highest rating, because Japanese debt is heading into "uncharted territory." U.S. equities fell despite signs that the housing market is stabilizing. Silver dropped 0.5% and platinum 0.2% while palladium bucked the trend by gaining 0.8%.

At the close: June gold dropped $12.10 to $1,576.60; July silver fell 14 cents to $28.18; July platinum slipped $3.10 to $1,458.40; and June palladium added $4.75 to $615.55 an ounce.

The Financial Times reports that the ECB has been secretly keeping Greek banks afloat by providing an estimated 100 billion euros in emergency liquidity through its little-known "emergency liquidity assistance" facility (ELA). If these funds were cut off, Greece would be forced out of the eurozone. The OECD has called on EU leaders, meeting tomorrow in Brussels, to create eurozone bonds to recapitalize weakened banking systems, which would restore credit availability and stimulate growth.

Sean Boyle, CEO of mining giant Agnico Eagle, said yesterday that the gold price will rise to more than $3,000 an ounce within the next 24 months. In his view, eurozone problems will persist and central bank purchases will increase. He also sees growing demand in China and India creating positive correlations between equity markets and gold going forward.