[Following are excerpts from the current issue of the Weekend Update at Iacono Research.]

Despite CME Group (Chicago Mercantile Exchange) lowering margin rates for futures accounts, a stronger trade-weighted dollar spurred by safe haven buying due to Greece’s latest sovereign debt troubles sent precious metals prices sharply lower on Friday.

Before the late-week sell-off, the gold price had tested the previous week’s multi-month high while silver reached a fresh three-month high as China continues to be the most important story for precious metals markets in 2012, speculation growing about how much gold their central bank is buying and how high retail gold and silver sales will rise this year.

For the week, the gold price fell almost four dollars, from $1,725.90 an ounce to $1,722.10, as the silver price dropped eight cents– from $33.67 an ounce to $33.59. The yellow metal is now up 9.9 percent for the year, but down 10.4 percent from its 2011 high, and silver has risen 20.6 percent in 2012, down 32.1 percent from its peak last spring.

Despite its “safe haven” reputation, over the short-term, gold continues to move with other risk assets when investors become skittish and seek safety in the U.S. dollar and U.S. Treasuries, almost exclusively. Such was the case on Friday, as elected officials in Greece resigned their posts in protest of austerity measures that they thought went too far, imperiling the next $170 billion in bailout money needed to avoid a debt default next month that would plunge the area into chaos.

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