Gold and Silver Decline as Bernanke Speaks
Both precious metals traded in the red, despite the U.S. dollar edging lower and the euro paring losses after Moody’s downgraded France. The ratings agency downgraded the eurozone’s second largest economy one notch to Aa1 from AAA. Fitch is now the only ratings agency that has a triple-A rating on French debt.
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Gold and silver received pressure as Ben Bernanke spoke at the Economic Club in New York. The Federal Reserve Chairman did not offer any new hints of additional easing, and urged Washington to take action. He said, “The Congress and the Administration will need to protect the economy from the full brunt of the severe fiscal tightening at the beginning of next year that is built into current law–the so-called fiscal cliff. The realization of all of the automatic tax increases and spending cuts that make up the fiscal cliff, absent offsetting changes, would pose a substantial threat to the recovery–indeed.” He also notes that the central bank does not have the tools to offset a plunge over the fiscal cliff.
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined 0.35 percent, while the iShares Silver Trust (NYSEARCA:SLV) traded flat. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) fell 0.70 percent and 0.90 percent, respectively. Silver names such as Silver Wheaton (NYSE:SLW) and Hecla Mining (NYSE:HL) both dropped about 2.0 percent.
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Disclosure: Long EXK, AG, HL, PHYS