Gold and Silver Prices Tumble

Gold prices plunged on Tuesday as euro slid sharply on a day when growing political uncertainty in Greece unnerved the market sentiment even as China’s strong import figures did very little to arrest the fall in the metal. Silver prices have also fallen sharply in trading today.

Earlier today, gold investors took a little sigh of relief when a data showed that exports of gold from Hong Kong to mainland China rose in April, providing expectations that demand for metal could soar in the longer term; however, the news did very little to support the price on Tuesday.

In a note Commerzbank analysts wrote, “Rising prosperity levels among the population coupled with tighter laws governing property speculation are likely to contribute to sustained high demand for gold in China.”

Nonetheless, gold in the shorter term is more inclined to drop due to weakness in the euro, according to analysts.

At last check, Spot gold edged lower 1.4 percent on the day at $1,614.81 an ounce.

“It is a much more hazardous environment (for gold) at the moment because of the downside risks to euro/dollar,” said Michael Lewis, an analyst at Deutsche Bank.

Meanwhile, in the U.S. speculative investors have reduced their exposure by almost a third in last ten weeks, to their lowest in a month, according to Reuters.

Moving onto other precious markets, silver– which heading towards a third consecutive monthly decline, was down 1.9 percent on the day at $29.43 an ounce.

Silver prices have plunged more than 13 percent in the last three months. The metal prices were weighed down by decline in the gold price, rising production, near-record inventory levels on the U.S. futures exchange and an uncertain demand outlook.

The iShares Silver Trust (ETF) (NYSE: SLV) is currently trading 2.46% lower at $28.49, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is currently trading 4.98% lower at $44.44, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently trading 4.93% higher at $12.56.

Platinum was also losing 0.6 percent on the day at $1,512.49 an ounce, while palladium also fell 1.7 percent on the day at $631.22 an ounce.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.