Gold price sliding $11.50 to $1,488.50 per ounce

The gold price fell back under $1,500 per ounce Friday morning, sliding $11.50 to $1,488.50 per ounce. Precious metals and commodities were weaker across the board, led by a 2.1% drop in the silver price to $33.96 per ounce and a 0.9% fall in crude oil to $94.56 per barrel. While the gold price declined, the U.S. dollar traded flat versus the euro and most of its foreign counterparts.

Commenting on the implications for the gold price, Dan Smith, a metals analyst with Standard Chartered, wrote in a note to clients that although the Greek vote is not supportive of gold, other economic factors have helped keep the gold price north of $1,500 per ounce. “We see a lot of confusion about the Greek situation. The whole situation in Europe is distorted,” Smith stated. “There has been some safe-haven buying because of Greece and it’s coming out of the market now … But the long-term story is still bullish for gold. Investors are looking for protection against event risk.”

With real interest rates still negative across most of the globe, the fundamental macro-economic backdrop for the gold price remains supportive. The big question entering the second half of 2011 is whether gold mining stocks will be able to end their consistent underperformance of the gold price, a phenomenon that has driven many investors to shun the gold stocks in favor of the more direct leverage offered by exchange-traded funds.