Political unrest in Egypt and Portugal burnished gold’s safe haven appeal, sending the metal higher in Wednesday trading. European markets tumbled after two Portuguese ministers abandoned the coalition government to protest its economic policy.
If Portugal’s government collapses, it could undermine the European Union’s financial bailout of the country. Ripple effects from that could spill into Greece where austerity measures linked to Greece’s bailout remain very unpopular.
In Egypt, the military moved quickly to oust elected President Mohamed Morsi, who had been in office for less than one year. While most other political parties in Egypt agreed to a roadmap laid down by the military, Morsi’s large Muslim Brotherhood party has yet to make its move.
Egypt is the largest country, by population, in the Middle East and a long-standing U.S. ally. The crisis has driven oil prices to their highest level since May 2012.
Gold futures for August delivery climbed 0.7% to $1,251.90 per ounce on Wednesday, according to CME Group. Gold traded as high as $1,259.30 and as low as $1,236. Gold bullion closed in London at $1,255, according to BullionVault.
Silver futures for August delivery rose 2% to $19.70 per ounce. Wednesday’s high for silver was $19.82 while the low was $19.31.
Gold and silver funds improved in Wednesday trading.
- The SPDR Gold Trust (GLD) increased 0.6%.
- The iShares Gold Trust (IAU) added 0.7%.
- The iShares Silver Trust (SLV) climbed 1.8%.
Gold and silver mining ETFs advanced during the day.
- The Market Vectors Gold Miners ETF (GDX) rose 1.8%.
- The Market Vectors Junior Gold Miners ETF (GDXJ) gained 1%.
- The Global X Silver Miners ETF (SIL) moved up 1.9%.
Gold mining shares mostly climbed on Wednesday.
- Agnico-Eagle Mines (AEM) added 3.2%.
- Barrick Gold (ABX) edged up 1.2%.
- Eldorado Gold (EGO) gained 3%.
- Goldcorp (GG) increased 3.6%.
- Kinross Gold (KGC) rose 3.3%.
- Newmont Mining (NEM) fell 0.5%.
- NovaGold Resources (NG) was unchanged.
- Yamana Gold (AUY) improved 3.6%.
Silver mining shares gained during the day.
- Coeur d’Alene Mines (CDE) added 1.8%.
- Hecla Mining (HL) rose 1.4%.
- Pan American Silver (PAAS) surged 3.9%.
- Silver Wheaton (SLW) increased 1.5%.
- Silver Standard Resources (SSRI) grew 3.3%.
As of this writing, Christopher Freeburn did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.