Gold Weaker, Silver Higher as Nations Pledge Support for IMF

by Andrew Burger | April 17, 2012 12:07 pm

Gold was weaker but silver higher Tuesday morning as good news from Europe and better-than-expected earnings[1], along with a dividend declaration, from investment banking bellwether Goldman Sachs (NYSE:GS[2]) sent stocks higher on the open.

Spot gold was down 0.18%, bid at $1,649.90 per ounce, having traded as high as $1,657.70 and as low as $1,633.50, according to Kitco market data[3]. The London afternoon reference price was set at $1,635.50, $17.50 per ounce lower than Monday’s afternoon reference price.

Spot silver was showing a 0.67% gain, bid at $31.74 per ounce. The morning high as of time of writing was $31.99, and the low was $31.30. Tuesday’s reference price was set at $31.64 in the London a.m., 32 cents per ounce above Monday’s price fix.

Housing starts declined 5.8% in March[4] while new building permits jumped 4.5% to their highest level since September 2008, the Commerce Department reported.

Spanish 10-year treasury bond yields[5] dropped below 6%, to 5.92%, on Tuesday following a new T-bill auction that saw healthy demand. Elsewhere in Europe, German investor confidence unexpectedly rose to a two-year high in April. The ZEW Center for Economic Research’s index of investor and analyst expectations[6] increased to 23.4 from 22.3 in March, the fifth consecutive gain and its highest level since June 2010.

Shoring up its finances ahead of an IMF meeting to begin on Friday, Japan announced[7] it will provide $60 billion in loans to the IMF, becoming the first non-European nation to do so. The IMF is looking to raise capital to backstop potential crises in the eurozone. Sweden and Denmark[8] followed suit, bringing the day’s total pledges of support to at least $77 billion.

Gold bullion prices remained range-bound, hovering near $1,650 per ounce in London morning trading Tuesday, BullionVault reported in its London Gold Market Report[9].

“Gold remains in a bearish trend so long as it stays below $1697, which was the most recent top on March 27,” say technical analysts at bullion bank Scotia Mocatta, BullionVault reported.

In exchange trading, gold trusts were flat while the iShares Silver Trust (NYSE:SLV[10]) was higher.

• The SPDR Gold Trust (NYSE:GLD[11]) was hovering around the unchanged mark.
• The iShares Gold Trust (NYSE:IAU[12]) was doing the same.
• The iShares Silver Trust was higher, up between 0.9% and 1.1%.

Gold and silver mining ETFs were heading higher.

• The Market Vectors Gold Miners ETF (NYSE:GDX[13]) was showing gains of some 2.25%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ[14]) was showing gains of around 2.5%.
• The Global X Silver Miners ETF (NYSE:SIL[15]) was up around 2.4%.

Gold mining shares were showing strong gains.

• Agnico-Eagle Mines (NYSE:AEM[16]) was showing strong gains, jumping up some 4.7%.
• Barrick Gold (NYSE:ABX[17]) was up around 1.75%.
• Eldorado Gold (NYSE:EGO[18]) was around 3% higher.
• Goldcorp (NYSE:GG[19]) was showing gains of around 1.5%.
• Kinross Gold (NYSE:KGC[20]) was up around 2.25%.
• Newmont Mining (NYSE:NEM[21]) was up more than 0.9%.
• NovaGold Resources (AMEX:NG[22]) was up more than 2.5%.
• Yamana Gold (NYSE:AUY[23]) was up nearly 0.7%.

Silver mining shares were being hit by sellers as well.

• Coeur d’Alene Mines (NYSE:CDE[24]) was showing gains of around 3%.
• Hecla Mining (NYSE:HL[25]) was up between 2.4% and 2.7%.
• Pan American Silver (NASDAQ:PAAS[26]) was showing gains of around 1.15%.
• Silver Wheaton (NYSE:SLW[27]) was sharply higher, up nearly 3%.
• Silver Standard Resources (NASDAQ:SSRI[28]) was up around 2.1%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault[29] contributed to this report.

Source URL: https://investorplace.com/2012/04/gold-weaker-silver-higher-as-nations-pledge-support-for-imf/

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