Daily Gold Update

Source: Marketwatch

San Francisco— Silver futures on Wednesday led yet another commodities selloff , down 8% as traders judged a default for Greece unavoidable, a sentiment that weighed down the euro and sent the dollar higher. Gold for June delivery declined $15.50, or 1%, to settle at $1,501.40 an ounce on the Comex division of the New York Mercantile Exchange. July silver retreated $2.97, or 7.7%, to settle at $35.52 an ounce. Greece�s debt restructuring seems �inevitable,� said Bill O�Neill, a principal at Logic Advisors in New Jersey. �That�s a real threat to the banking system.�

In a restructuring, investors holding Greek debt will likely be offered less than face value for the bonds they hold. The stark possibility was enough to drag down the euro and prop the dollar up against most major currencies. A stronger dollar is negative for commodities as it makes them more expensive to holders of other currencies. For gold, and to a lesser extent for silver, dollar movements add another layer of complexity as dollar weakness and its twin fear of currency devaluation often spark precious metals buying. Gold held up better than silver because it got some flight-to-quality support, said Adam Klopfenstein, a senior market strategist at Lind Waldock in Chicago. See full story.