Gold has received a great deal of negative press lately. In a recent interview printed in the South China Morning Post, George Soros says, “Gold was destroyed as a safe haven, proved to be unsafe. Because of the disappointment, most people are reducing their holdings of gold.” However, he also notes that central banks are still buying gold, so he doesn’t “expect gold to go down.”
UBS estimates that central banks purchased around 54 metric tons of gold in the first two months of 2013, worth nearly $3 billion. Precious metals strategist Edel Tully explains, “While the information is backward-looking, the vote of confidence from central banks does help market sentiment when the buying is confirmed. The real value in central bank gold buying, though, is when it occurs and/or when market participants think it is around.”
By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) declined 0.43 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell 0.27 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) both closed less than 1.0 percent lower. Silver miners (NYSEARCA:SIL) such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) both dropped more than 2.0 percent.
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Disclosure: Long EXK, AG, HL, PHYS