Gold Down Hitting 3-Week Low

New York (May 27)  Gold prices drop sharply lower to a three-week low in early U.S. trading Tuesday. The long holiday weekend in the U.S. saw potential geopolitical tensions de-escalate just a bit.

U.S. stock indexes are at or near record or multi-year highs, while the U.S. dollar index is weaker. June Comex gold was last down $14.40 at $1,277.40 an ounce. Spot gold was last quoted down $15.00 at $1,278.00. July Comex silver last traded down $0.30 at $19.11 an ounce, while silver drops 25 cents to $19.14.  Platinum sheds $13 to $1465, while palladium edges lower by $1 to $834.

The Russia-Ukraine territorial crisis appears to have ratcheted down at least a notch over the holiday weekend. The Ukraine held a presidential election on Sunday. The new president-elect of Ukraine, Petro Poroshenko, said he wanted to work with Russia and with Europe on integrating his country into both. Recent rhetoric from Russian president Vladimir Putin also seemed to be more conciliatory.  This news allowed some more risk appetite to creep back into the market place Tuesday. However, reports also said there is still significant fighting occurring between Ukrainian government troops and pro-Russian separatists.

The European Union saw parliamentary election results during the weekend.  Italy and Germany saw their present governing parties declare victory, which was deemed as calming to the market place. There had been concern in the EU about anti-EU candidates making a strong showing, which helped to push EU periphery countries’ bond yields higher recently. However, the so-called Euro-skeptics did make progress in France and the United Kingdom. The Euro currency and European stock markets were supported by the weekend EU election results.