Gold & Silver Bounce After Sharp Monday Sell-Off; Crude Oil Climbs Despite Extra "Sour" Saudi Supply

From Chris Mullen at GoldSeek.com...

Gold and silver saw over 0.5% gains in Asia on Monday and traded near unchanged in London trade before plummeting at the New York open.

The Gold Price fell as low as $875.55 and silver dropped to $16.542 by 09:00 EST as the Dollar bounced higher on weak data out of Europe that suggests the European Central Bank (ECB) might not be as aggressive in raising interest rates as forecast.

Both Gold and silver then bounced slightly higher into the close, but they still ended with losses of 1.88% and 3.42% respectively.

The Gold Price in Euros fell to about €570, platinum lost $15 to $2038.50, and copper fell a couple of cents to about $3.81.

Gold and silver equities fell about 2% at the open, but they then climbed back higher for the rest of trade and ended modestly higher despite the poor performance of the metals earlier in the day.

Crude oil prices initially fell on profit-taking after the Saudis officially announced an increase in production to 9.7 million barrels per day. But the market is wary they don't have the capacity to increase output any further, and oil ended higher on the day as a result of continued supply concerns.

Also troubling is that Saudi Arabia does not produce the light sweet crude needed for gasoline which comes from politically unstable areas like Nigeria. The sour crude available under Saudi Arabia's extra commitments needs more refining, which isn’t necessarily available or quickly solved due to the lengthy process of commissioning new plants.

Treasuries and the Dow, Nasdaq, and S&P remained near unchanged despite higher oil prices as most are waiting for the Federal Reserve's interest-rate announcement on Wednesday.

There were no major US economic reports Monday. Today brings Consumer Confidence report for June, expected to show a further decline.

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