Gold opens second half of the year under $1,500

In the Lead: “The China syndrome...of another kind”

However, it might also turn out to be the case that the current global slowdown (in part, a natural mid-cycle occurrence, and, in part, a legacy of spiking food and energy prices) might jeopardize that which the previous accommodative policies had hoped to bring about. At such a juncture, hiking rates might not figure at the top of the “to-do” list for various official institutions; not yet, anyway.

Of more possible “urgency” for some, might be the issue of the potential departure of Tim Geithner from his Treasury Secretary post. Media reports indicate that Mr. Geithner might be contemplating the move for personal reasons albeit some critics of the Secretary have cited his “rocky” tenure as perhaps having played a hand in the development. As of this morning, Mr. Geithner has been downplaying such rumors of departing by stating that he is likely to remain on the job “for the foreseeable future.”

Spot gold dealings opened the first session of July with a loss of $7.30 per ounce and bullion was quoted at $1,492.50 on the bid-side in New York at 08:20 this morning. Book-squaring ahead of the weekend was expected to remain a principal feature of today’s action but readings of the US’ consumer sentiment, ISM manufacturing, and construction spending gauges were also due later in the morning and were also expected to play a role in the subsequent trading action patterns on the day.

Analysts at Resource Capital Research anticipate that gold prices might peak in the second half of the current year and then experience a decline in 2012. An average price of $1,550 is envisioned by RCR analysts for the remainder of 2011. However, the RCR team offered this note of sobering caution as regards the outlook for bullion in the coming year and beyond:

“We are concerned about the recent outflows of gold onto the market from exchange traded funds. We do not expect the US dollar to collapse, and we consider inflation fears are overstated. Eventually, gold’s unique safe-haven appeal could start to dissipate. Our guess is in the first half of 2012, particularly if we see signs of recovery in equity and property markets, and positive real interest rates in the US.” Readers of these articles may note a…familiar tone in these observations; one often offered up as food for current and future thought, right here.

Silver lost over 70 cents in early trading; it was quoted at the $34.00 mark per ounce on the bid-side. The white metal is now some $4 under significant resistance levels and appears headed towards the $30 or just under area according to some chartists. Platinum and palladium were not spared of the selling spree manifest on this Friday either; the former shed $16.00 to ease to the $1,706.00 level and the latter dipped $3 to touch the $750.00 per ounce mark. Rhodium continued unchanged at the $1,925.00 per troy ounce bid-side quote.

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