Gold Drops 2%, Silver Falls 1.8%

Gold settles at 3.5-month low on Tuesday

Bullion prices ended the U.S. day session sharply lower and gold scored a 3.5-month low on Tuesday, 27 May 2014. The long holiday weekend in the U.S. saw potential geopolitical tensions de-escalate. There was a heavy slate of U.S. economic data released on Tuesday, including durable goods orders. Most of this data was upbeat and that also was in favor of the gold market bears on Tuesday.

Gold for June delivery fell $26.20, or 2%, to settle at $1,265.50 an ounce on the Comex division of the New York Mercantile Exchange.

July silver lost 35 cents, or 1.8%, to end at $19.07 an ounce.

The European Union saw parliamentary election results during the weekend. Italy and Germany saw their present governing parties declare victory, which was deemed as calming to the market place. There had been concern in the EU about anti-EU candidates making a strong showing, which helped to push EU periphery countries' bond yields higher recently.

Among latest economic data expected at Wall Street today, durable orders rose 0.8% in April (consensus -1.3%). Excluding transportation, orders jumped 0.1% (consensus -0.2%). The Case-Shiller Home Price Index showed prices up 12.4% year-over-year in March (consensus +11.8%); and the Consumer Confidence Index for May edged up to 83.0 (consensus 82.7) from 81.7 in April.

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