Economic Reports Spur Gold, Silver Gains Early Tuesday

by Andrew Burger | January 17, 2012 11:59 am

Gold, silver and stock markets were in a positive mind-set early Tuesday, shrugging off eurozone debt concerns, as well as France and Austria losing their AAA credit ratings from Standard & Poor’s. Investors and traders were focused on positive reports on German and northeast regional U.S. manufacturing, a healthy auction of French treasury bills and China reporting slightly higher-than-expected Q4 GDP.

Spot gold was trading 1% higher Tuesday morning, with a bid price of $1,659.20 per ounce and an ask price of $1,660.20. Spot gold traded as high as $1,665.90 and as low as $1,655.20. The London afternoon reference price fix came in at $1,656, $21.50 per ounce higher than last Friday’s reference price, according to Kitco market data[1].

Newmont Mining (NYSE:NEM[2]) shares were down more than 3% following management’s latest guidance on 2012 production of gold and copper.

Spot silver was up over 1.55%, bid at $30.44 per ounce with an ask price of $30.54. The morning high as of time of writing was $30.69 and the low was $30.07. Friday’s reference price was set at $30.41 in the London a.m., 77 cents per ounce higher than last Friday’s price fix.

Market participants were prone to downplay S&P’s latest credit rating downgrades and negative watch outlooks. Boosting optimism was a smooth auction of French T-bills and a strong KZW report[3] on economic sentiment, which jumped 32.2 points to -21.6 in January, its highest level since July 2011, according to a Wall Street Journal report. Also, although China reported that year-to-year Q4 GDP growth fell to its lowest level in more than two years[4], the 8.9% print was better than expected.

The load weighing on markets was lifted further with the release of the New York Federal Reserve’s January Empire State Manufacturing Survey[5], which indicated that manufacturing activity expanded in the state. The general business conditions index rose five points to 13.5 on a monthly basis, while employment indices were positive and higher.

Gold bullion prices rose to a five-week high[6] in London morning trading Tuesday, and silver bullion rose to last week’s two-month high above $30.50, BullionVault reported in its London Gold Market Report.

“Gold price action is becoming increasingly indifferent to physical trade and far more susceptible to broader market headwinds,” says a note from Japanese trading house Mitsui’s London office.

Gold and silver trusts were showing strong gains on U.S. exchanges.

• The SPDR Gold Trust (NYSE:GLD[7]) was showing gains of around 1.4%.
• The iShares Gold Trust (NYSE:IAU[8]) also was up nearly 1.4%.
• The iShares Silver Trust (NYSE:SLV[9]) was up more than 2.4%.

The junior gold and silver mining ETFs also were moving higher, though the Market Vectors Gold Miners ETF (NYSE:GDX[10]) was showing losses.

• The Market Vectors Gold Miners ETF was down about 0.6%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ[11]) was up around 1.6%.
• The Global X Silver Miners ETF (NYSE:SIL[12]) was up over 2%.

Gains in gold mining shares were muted, and shares of Newmont Mining were down sharply based on its latest fiscal 2012 guidance[13] on gold and copper production.

• Agnico-Eagle Mines (NYSE:AEM[14]) was showing losses of some 1.1%.
• Barrick Gold (NYSE:ABX[15]) was down around 0.15%.
• Eldorado Gold (NYSE:EGO[16]) was up 1.5%.
• Goldcorp (NYSE:GG[17]) was up more than 0.6%.
• Newmont Mining was down more than 3%.
• NovaGold Resources (AMEX:NG[18]) was up about 0.3%.
• Yamana Gold (NYSE:AUY[19]) was trading flatly.

Silver mining shares were up Tuesday.

• Coeur d’Alene Mines (NYSE:CDE[20]) was moving higher, up some 1.35%.
• Hecla Mining (NYSE:HL[21]) was up around 2.35%.
• Pan American Silver (NASDAQ:PAAS[22]) was up around 2.5%.
• Silver Wheaton (NYSE:SLW[23]) was showing gains of 1.5%.
• Silver Standard Resources (NASDAQ:SSRI[24]) was up 1.35%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault[25] contributed to this report.

Source URL: https://investorplace.com/2012/01/gold-silver-prices-gld-bullion-newmont-mining-stocks/

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