Gold, Silver Slightly Lower on European Bond Swap Rejection

by Andrew Burger | January 24, 2012 12:20 pm

Gold and silver were slightly lower Tuesday morning after European leaders rejected a debt resolution proposal by private-sector owners of Greek government bonds, and after U.S. companies delivered a mixed batch of earnings reports[1].

Spot gold was down nearly 0.5% this morning, bid at $1,668.20 per ounce with an ask price of $1,669.20. Spot gold traded as high as $1,669.70 and as low as $1,660. The London afternoon reference price fix came in at $1,665.50, $10 per ounce lower than Monday’s reference price, according to Kitco market data[2].

Spot silver was showing minimal losses, bid at $32.33 per ounce with an ask price of $32.43. The morning high as of time of writing was $32.43 and the low was $31.91. Friday’s reference price was set at $31.95 in the London a.m., 50 cents per ounce lower than Monday’s fixed price.

Coupon rates were reported as being the main stumbling block[3] for European finance ministers as they rejected the Private Sector Initiative Greek debt resolution package from private holders represented by the of Greek government debt. Represented by the International Institute of Finance’s Charles Dallara, private-sector bondholders offered to accept a 65%-to-70% writedown of existing Greek government bonds in return for swapping them for new long-dated Greek treasury debt with 4% coupons. Officials rejected the proposal, countering by saying that 3.5% coupons were necessary.

Gold bullion prices retreated[4] to where they started the week after hitting a six-week high of $1,677 an ounce in London morning trading Monday, according to BullionVault’s London Gold Market report.

“Gold succumbed to profit-taking yesterday,” Standard Bank commodities strategist Marc Ground said. “The trend has continued into this morning, with the absence of Far East physical demand (due to Lunar New Year holidays) opening up the metal to further downside.”

Gold and silver trusts were heading lower Tuesday morning.

• The SPDR Gold Trust (NYSE:GLD[5]) was moving lower, down nearly 0.6%.
• The iShares Gold Trust (NYSE:IAU[6]) also was showing losses of around 0.6%.
• The iShares Silver Trust (NYSE:SLV[7]) was down about 0.15%.

Gold and silver mining ETFs were moving lower as well.

• The Market Vectors Gold Miners ETF (NYSE:GDX[8]) was showing losses of around 1.35%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ[9]) was down nearly 1.2%.
• The Global X Silver Miners ETF (NYSE:SIL[10]) was down around 1.15%.

Gold mining shares were showing losses, though

NovaGold Resources (AMEX:NG[11]) was doing its best to buck the morning trend.

• Agnico-Eagle Mines (NYSE:AEM[12]) was showing losses approaching 2%.
• Barrick Gold (NYSE:ABX[13]) was down 2.1%.
• Eldorado Gold (NYSE:EGO[14]) was down 1.1%.
• Goldcorp (NYSE:GG[15]) was around 1% lower.
• Kinross Gold Corp. USA (NYSE:KGC[16]) was down some 0.75%.
• Newmont Mining (NYSE:NEM[17]) was down more than 1.5%.
• NovaGold Resources was flat to slightly higher.
• Yamana Gold (NYSE:AUY[18]) was trading lower, down around 0.25%.

Silver mining shares also were down in morning trading.

• Coeur d’Alene Mines (NYSE:CDE[19]) was moving lower, down around 0.4%.
• Hecla Mining (NYSE:HL[20]) was down slightly more than 1%.
• Pan American Silver (NASDAQ:PAAS[21]) was down around 2.15%.
• Silver Wheaton (NYSE:SLW[22]) was showing losses of 0.6%.
• Silver Standard Resources (NASDAQ:SSRI[23]) was down nearly 1.1%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault [24]contributed to this report.

Source URL: https://investorplace.com/2012/01/gold-silver-prices-europe-bond-swap-ng-gld-mining-stocks/

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