Gold Sets Another Record in Euro After U.S. Trade Deficit

Gold hit a record-high in euros for a second day running, reaching 1,118.58 euros in European trading Tuesday. Cconcerns about the fiscal situations in Greece, Italy and other highly indebted EU nations continue to plague the markets.� The U.S. dollar’s relative strength held the price of gold in dollars down.� Market participants are bearish about the results of the latest EU bank stress tests, which the European Banking Authority is due to release this Friday.

With a debt-GDP ratio of nearly 120%, concerns about Italy’s fiscal situation continued to trouble the debt markets.� The Italian government auctioned $6.9 billion in 12-month bills, but investors demanded a gross average yield of 3.67%, the highest since September 2008, according to a Bloomberg News report.� Italy’s 10-year bond yield also rose 30 basis points to more than 6% for the first time in 10 years before falling back after the auction, while the cost of insuring its debt also rose.

The dollar weakened and spot gold prices jumped some $10 an ounce, to around $1,552, in early NY trading after news that the US trade deficit widened to an unexpectedly high $50.2 billion in May due to the cost of crude oil imports, according to Kitco market data.� Spot gold was set at $1,550.50 an ounce at the London p.m. fix, up from $1,544.50 an ounce at the morning fix.� Spot silver was set at $34.91 in London and was trading at $35.45 Bid, $35.55 Ask in NY morning trading.

Gold and silver ETFs were trading lower in NY morning trade.

• The SPDR Gold Trust (NYSE:GLD) was down between 0.25% and 0.5% in early Tuesday stock trading.
• The iShares Gold Trust (NYSE:IAU) was down about the same amount.
• The iShares Silver Trust (NYSE:SLV) was down around 1%.

Major gold and silver mining ETFs were mixed, with the mining major ETFs firmer and the junior gold ETF slightly lower.

• The Market Vectors Gold Miners ETF (NYSE:GDX) was up more than 1% early Tuesday.
• The Market Vector Junior Gold Miners ETF (NYSE:GDXJ) was down slightly.
• The Global X Silver Miners ETF (NYSE:SIL) was trading around 0.1% higher.

Major gold mining stocks were broadly higher, though NovaGold Resources (AMEX:NG) continued to trade lower for a second day running.

• Agnico Eagle Mines (NYSE:AEM) was trading up between 0.2% and 0.4%.
• Barrick Gold (NYSE:ABX) was up around 0.5%.
• Goldcorp (NYSE:GG) was up between 0.2% and 0.6%.
• Newmont Mining Corp. (NYSE:NEM) was trading up around 1/4% to 0.3%.
• NovaGold Resources (AMEX:NG) was off more than 0.4%.

Silver mining shares were mostly higher, with Silver Wheaton (NYSE:SLW) up nearly 1.5%.

• Coeur D’Alene Mines Corp. (NYSE: CDE) was up between 0.9% and more than 1%.
• Hecla Mining (NYSE: HL) was trading around 0.5% lower.
• Pan American Silver Corp. (NASDAQ: PAAS) was trading nearly 1% higher.
• Silver Wheaton Corp. (NYSE: SLW) was up between 1.3% and 1.5%.
• Silver Standard Resources Inc. (NASDAQ: SSRI) was up around 0.15%.

The author does not hold position in any of the above-mentioned investments.