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Gold, Silver Down to Close Out Losing Week

No definitive actions were taken by the U.S. or eurozone central banks to contain the eurozone debt/credit crisis


Gold Silver GLD IAU SLVGold and silver were headed lower to end the week as no definitive actions were taken by the U.S. or eurozone central banks.

Spot gold continued to fall Friday morning, down 0.26% and bid at $1,561.20 an ounce as of 11:19 a.m. The morning high reached $1,571.50, with the low at 1,557.10, according to Kitco market data. The London afternoon reference price was fixed at $1,565.50, $16.50 an ounce lower than Thursday’s price fixing.

Spot silver was down 0.67% and bid at $26.70. The day’s high thus far was $27.00 and the low $26.48. The London a.m. reference price was fixed at $26.81, a sharp $1.07 lower than Thursday’s reference price.

Seemingly on cue, the European Central Bank (ECB) took another monetary easing step, expanding the categories of securities it will accept as collateral on short-term loans, so-called repos, or repurchase agreements.

Moody’s downgraded 15 of the world’s largest banks’ credit ratings on Thursday, citing exposure to volatile capital markets activities, i.e., trading and underwriting, for the decisions. Included are Bank of America, JPMorgan Chase, Goldman Sachs, Citigroup, Morgan Stanley, HSBC, Barclays, Credit Suisse, Deutsche Bank, Royal Bank of Scotland, Societe Generale, BNP Paribas, Credit Agricole and Royal Bank of Canada.

European finance ministers meeting in Luxembourg were clashing over new plans to contain the eurozone debt/credit crisis. Giving Greece more time to pare down its government debt is one major sticking point. How to go about lending €100 billion ($125 billion) for the Spanish government to recapitalize its banks without scaring investors away from Spanish government bonds is another. Spanish Treasury yields continued to rise to new record-highs.

IMF Managing Director Christine LaGarde has weighed in, urging eurozone finance ministers to channel emergency funds directly to struggling banks, as opposed to channeling them through governments. The IMF chief also urged the European Central Bank (ECB) to lower interest rates.

Meanwhile, the Ifo Institute reported that German business confidence fell to its lowest level in two years in June, to 105.3 from May’s 106.9.

Gold bullion dropped as low as $1,560 an ounce before regaining some lost ground heading into lunchtime in London morning trading Friday, BullionVault reported.

“We believe a break of $26.00 has the ability to trigger liquidation of silver with it looking for $18.00,” BullionVault quoted Scotia Mocatta’s latest technical analysis note.

Gold and silver trusts were headed lower in U.S. stock exchange trading Friday morning.

  • The SPDR Gold Trust (NYSE:GLD) was showing losses of around 0.3%.
  • The iShares Gold Trust (NYSE:IAU) was trading around 0.3% lower.
  • The iShares Silver Trust (NYSE:SLV) was down around 0.8%.

Gold and silver mining ETFs were down as well.

  • The Market Vectors Gold Miners ETF (NYSE:GDX) was down around 1.4%.
  • The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was nearly 0.7% lower.
  • The Global X Silver Miners ETF (NYSE:SIL) was down some 1.6%.

Gold mining shares were down across the board.

  • Agnico-Eagle Mines (NYSE:AEM) was around 0.4% lower.
  • Barrick Gold (NYSE:ABX) was around 1.8% lower.
  • Eldorado Gold (NYSE:EGO) was down around 0.25%.
  • Goldcorp (NYSE:GG) was around 0.62% lower.
  • Kinross Gold (NYSE:KGC) was down around 2.25%.
  • Newmont Mining (NYSE:NEM) was showing losses of nearly 0.4%.
  • NovaGold Resources (AMEX:NG) was down more than 3%.
  • Yamana Gold (NYSE:AUY) was around 1.9% lower.

No gainers were to be found among silver mining shares either.

  • Coeur d’Alene Mines (NYSE:CDE) was down around 1.1%.
  • Hecla Mining (NYSE:HL) was down some 1.75%.
  • Pan American Silver (NASDAQ:PAAS) was down around 2.75%.
  • Silver Wheaton (NYSE:SLW) was down some 2.6%.
  • Silver Standard Resources (NASDAQ:SSRI) was showing sharp losses of more than 3.3%.

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

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