By: James Moore London 13/06/2011 - Gold and the rest of the precious metals slipped lower Friday on a mix of end of week profit taking, a stronger dollar and speculation of sales by the IMF after a media report caused confusion over IMF on-market sales via the Central Bank Gold Agreement. The complex finished down a net 1.45% with gold off 0.95% and silver 3.75% after sliding lower at the start of US trade; a stronger dollar weighed on the PGMs across most of the day. SPDR gold holdings declined 10.6-tonnes as redemptions were seen. Despite Thursday's rebound and positive Greek debt news investors were again risk averse with both the Dow and S&P500 settling down 1.4%; the Greek government unveiled a new austerity program aimed at saving around €28bn and the German government voted in favour of a debt restructuring resolution for Greece. Commodities were also under pressure with the CRB Index settling down 0.8% after the dollar firmed on safe-haven bids; the DXY settled up 0.85%, EUR/JPY finished down 1.1%. Equity sentiment remains negative overnight with the Nikkei off 0.7% and the MSCI Asia Pacific Index 0.4% as investor concerns intensified over US debt levels; slowdown in China, stagnation in Japan and Eurozone debt restructuring. Data overnight has done little to bolster confidence after Japanese Core Machine Orders declined -3.3% having been expected to rise +2.0%, lending in China also tumbled from 740bn to 552bn; lending had been expected to slow to around 655bn. Currency markets have seen a relatively orderly start this morning with the dollar currently little changed against the euro and yen at the time of wrtiting. Economic data is light across the rest of today with much of Europe closed for local holidays. The highlights include Italian Industrial Production and UK RICS House Price Balance; ECB President Trichet, MPC Member Weale and FOMC Member Fisher are all scheduled to speak. The precious metals have seen a softer start this morning, off a net 0.45% from Fridays closing levels as a result of weaker commodities and equity sentiment. Trade looks set to remain mixed in the coming sessions with the complex vulnerable to further pressure in the coming sessions as global growth and debt concerns could threaten a broader rout of risk appetite. However, the mix of safe-haven diversification and negative real-interest rates continue to create a positive price environment for gold longer-term and we expect dips to still be viewed as buying opportunities.

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