Precious Metals, Gold and Silver Shares Retreat
Precious metals continued to head lower Wednesday morning following yesterday afternoon’s sell-off as the U.S. dollar advanced further against a composite of the world’s most-traded currencies.
Gold futures slid $15.70, or 0.9%, to $1,750.70 per ounce, their lowest level in two weeks. Silver futures fared better than the yellow metal, but still dropped by $0.16, or 0.5%, to $33.79 per ounce.
Commenting on today’s gold price weakness, Saxo Bank vice president Ole Hansen stated that the decline ”Has been brewing all week following the return of dollar strength. With activity fairly light, someone went looking for stops and found them below $1,755. With that support now removed, the true strength of the current rally is about to be tested.”
“My feeling is that buyers will be lurking in the wings and this move was necessary to establish proper support following the run higher,” Hansen added. “With QE excitement disappearing fast, it is left to stand on its own feet and with the headwind from a stronger dollar it will be exciting to watch indeed.”
As for gold and silver stocks, the Philadelphia Gold & Silver Index (XAU) sunk 2.6% o 181.03, near a two-week low as well. Three of the largest decliners in the XAU included AngloGold Ashanti (AU), Eldorado Gold (EGO), and Hecla Mining (HL). AU fell by 3.3% to $34.41 per share, EGO by 3.3% to $14.21 per share, and HL by 5.6% to $6.10 per share.
The broader equity markets, which dropped alongside the precious metals sector yesterday, held near the flatline this morning, as the S&P 500 Index inched down by only 0.1% to 1,439.72.
Source: GoldAlert
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