Gold ends Monday 1.3% higher; US bond yield closes below 5% for first time in a month

From Chris Mullen at GoldSeek...

Spot gold prices jumped about $3 higher at Monday's open in Asia before it fell back near unchanged a few hours into trade.

The spot gold market then rose back above $650 in London, gained over 1% more in morning New York trade, and closed not far off its high with a gain of 1.36% for the day.

Silver jumped about 15 cents higher at the open in Asia before it added another 15 cents in New York and ended near its high with a gain of 2.44%.

For French and German citizens wanting to buy gold now, the Euro price of gold rose over €482, platinum gained $17 to $1,292, palladium gained $6 to $371, and copper gained roughly 5 cents to about $3.54.

Gold and silver equities jumped about 1% at the US open, continued to move higher throughout the day, and closed with over 2% gains.

US trading closes early on Tuesday and will remained closed through the 4th of July Holiday on Wednesday. The Dow, Nasdaq, and S&P all rose Monday on a new batch of takeover news and lower interest rates despite decent US economic data.

The ISM came in at the highest since April, 2006.  Tuesday at 10am EST brings Factory Orders for May expected at -1.2% and Pending Home Sales for May expected at 0.3%.

Oil fell in early trade on Monday after last week’s respectable gains, but it then rose in late trade and closed at a new 10-month high on continued worries over terrorist attacks ahead of the 4th of July. That holiday in the US also brings strong demand for gasoline during the busy summer driving season.

The US Dollar index fell dramatically to an over 2-month low as both the Euro and Yen found nice gains on worries over the US financial sector stemming from potential problems with subprime mortgages.

The British Pound rose to a 26-year high versus the US Dollar and the New Zealand Dollar rose above $0.78 “for the first time since being floated 22 years ago.”

Treasury bonds rose and interest rates fell despite a stronger than expected ISM reading as buying was spurred on both by terror anxiety and general worries over the health of the entire US financial sector thanks to the ongoing subprime mortgage bond trouble. Of special note is the yield on the 10-year US bond closing back under 5% for the first time in nearly a month.