Precious Metals are on the rise this morning ahead of what is viewed as a key Greek election. Global investors are most likely moving from their cash positions to the safe haven of Gold. Analyst Andrey Kryuchenkov said, “Not many will dare take on fresh longs ahead of the weekend given Gold's peculiar behavior recently, when it swings back and forth with or against risk sentiment.” In a note to its investors, HSBC wrote, “The next big event in the Gold world is likely to be the Greek election. Gold may be caught between the election and U.S. monetary expectations.”

Worldwide central banks stand poised to take action based upon Sunday’s Greek election. European Central Bank President Mario Draghi has hinted at poor economic conditions as a result of this election and is poised to act. He said, “There are serious downside risks here. … This risk has to do mostly with the heightened uncertainty.” The seriousness is evident as not only the ECB is poised to act, but countries including Japan, England and other G20 nations are preparing to stabilize the global impact. And although since his election, and differing views, French President Francois Hollande has taken Germany to task but shares the same view when it comes to Greece and Sunday’s election when he said, “But I have to warn them, because I am a friend of Greece, that if the impression is given that Greece wants to distance itself from its commitments and abandon all prospect of recovery, there will be countries in the eurozone which will prefer to finish with the presence of Greece in the eurozone.”

American markets are also holding firm ahead of the elections, as well. Strategist Peter Boockvar said, “Ahead of Sunday’s election in Greece,  central bankers stand ready, again. With all the water central banks have expended out of their fire hoses over the past few years in their attempt to ‘do something,’ I can only think of magic candles -- those candles you blow out that only flare up again immediately after.” The G20 is set to meet next week in Mexico, and financial leaders are expected to discuss the weakest global economy since 2009.

At 9:01 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,625.00, Up $5.40.
• Silver, $28.76, Up $0.25.

• Gold, $1,624.20, Up $4.80.
• Silver, $28.71, Down $0.34.

American stock futures are mostly flat this morning, with many investors seemingly unsure how to react to recent developments in Europe and the United States. David Morrison of GFT Markets said, “As we have seen many times recently, the previous day’s price action has been reversed in early trading. Yesterday we saw stocks rally” as a result of J.P. Morgan’s chief executive testifying before the Senate Banking Committee. However, stocks “then tumbled after an auction of U.S. 10 year Treasuries,” Morrison said. While investors believe stocks may not be the safest place for their money, Morrison said, “An increasing number are coming to the opinion that this continued flight into U.S. Treasuries despite pathetic yields is a very bad sign indeed.” Gold could benefit from this realization, as the metal has historically been a safe haven investment in times of uncertainty.

At a recent bond auction,  the yield on 10 year bonds in Spain  rose above 7 percent, which was the trigger point for Greece, Ireland, and Portugal when those countries requested aid from the European Central Bank. Moody’s Investor Service cut Spain’s credit rating by three notches and now rests one level above junk status. The pressure is on German Chancellor Angela Merkel to come up with a solution, but she recently shot down what she termed “miracle solutions,” calling them counterproductive and said that they would violate the German Constitution.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,627.50, Up $8.10.
• Silver, $29.01, Down $0.03.

American stock futures are pointing to a lower start,  and were pushed even lower  after a report indicated retail sales fell in May. Jim Reid of Deutsche Bank said, “In reality, price action is likely to remain unpredictable as we move towards this weekend, as position squaring will likely dominate ahead of the Greek election this Sunday.” The focus is squarely back on Greece in the eurozone, as the latest election could make or break the repeated bailout attempts for the troubled country. Gold recovered from early losses after release of the retail sales report.

Since 2008, more than  $6 trillion has been printed as part of money-printing or quantitative easing programs  by the central banks of the world. Further quantitative easing remains a near term possibility for all of the “Big Four” (Federal Reserve, European Central Bank, Bank of England, Bank of Japan). Many investors assume that further easing is sure to happen, said Bank of America Merrill Lynch’s Gary Baker.

The central banks seem to know a way to offset the inflation created by money printing, however. According to the World Gold Council,  Gold makes up more than 70 percent of the reserves of countriesincluding the United States, Germany, Italy and France. Kazakhstan is the latest to significantly increase its holdings in the metal, and by the end of the year expects to have holdings up to 20 percent. The country has bought 16.2 tons of Gold through April of this year, and expects that number to be 24.5 tons in the second half of the year.

At 9 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,622.50, Up $8.70.
• Silver, $29.02, Down $0.03.

Precious Metals prices have remained relatively steady, rising a bit during early morning trading. Some analysts are saying that the safe haven appeal of Gold is borne not of the eurozone worries, but actually what those worries could do to the U.S. economy. Analyst Nic Brown said, “Gold is sitting, waiting for something to happen, but I would argue it is waiting for something to happen in the United States, rather than Europe. (We need) more clarity in the United States over whether the economic data is going to improve again … or whether the weakening data is a sign of slower economic growth, and that therefore the Fed will have to do something. For me, the focus is definitely on the U.S. side of the Atlantic. In the meantime,  Gold is going up, down or sideways dependent on what is going on in the euro/dollar rate, and there isn’t a great deal else that is moving it around.”

In an interesting turn of events, outspoken Austrian Finance Minister Maria Fekter put Italy right back in the eurozone spotlight with Spain. However, Italy does not have nearly the exposure that Spain does, considering its much lower unemployment rate and lack of banking exposure to the real estate crisis. In Fekter’s opinion, “Italy has to work its way out of its economic dilemma  of very high deficits and debt, but of course it may be that, given the high rates Italy pays to refinance on markets, they too will need support.” Meanwhile, Italian Prime Minister Mario Monti called her remarks “completely inappropriate.” The nation of  Cyprus also could be looking for a bailout, and it could become the fifth country to make such a request. Banking issues in Cyprus are bringing the need to light.

At 9:01 a.m. (EDT), the APMEX Precious Metals spot prices were:

• Gold, $1,604.80, Up $7.80.
• Silver, $28.93, Up $0.23.

Jeff Kilburg of Kilburg Capital said he still expects  Gold to soar to $2,000  in 2012. “I think (Federal Reserve Chairman Ben) Bernanke has one more bullet left in the chamber,” Kilburg said, and he has to use it wisely. There is no reason not to expect the 12 year Gold bull run to continue given the economic uncertainty around the globe. Central banks became net buyers of Gold in 2010, and they have been net buyers in 2011 and 2012. The current global economic uncertainty could propel this trend forward.

Gold did not have a good week, but it did  rebound from morning losses  to climb back into the positive. Traders appeared to be unwilling to short Gold going into the weekend because there are too many potential Gold moving catalysts in the marketplace. Although expectations of an immediate round of quantitative easing were squashed this week by Bernanke, QE3 is still not out of the picture. The European debt crisis is far from being resolved. The Chinese economy remains covered in a veil of secrecy by Chinese leaders. It is very difficult for investors to get a handle on what is truth and what is fiction.

Markets are closed until 6 p.m. (EDT) Sunday. We will see if the traders were correct in not betting against rising Gold prices over the weekend.

At 5 p.m. (EDT), the APMEX Precious Metal prices were:

• Gold, $1,596.10, up $7.10.
• Silver, $28.55, down $0.07.