Gold and Silver Hit by Heavy Selling

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On Wednesday, gold (NYSEARCA:GLD) futures for December delivery fell $25.80 to settle at $1,716.50 per ounce, while silver (NYSEARCA:SLV) dropped 30 cents to close at $33.68.

Both precious metals instantly witnessed heavy selling volume at the open, despite little news in the sector. A CME Group (NASDAQ:CME) spokesman even confirmed that “there was no fat-finger trades or technical errors, this was a market-driven selloff.” A large seller dumped more than 7,000 gold contracts on the exchange in morning trading.

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The broad equity market also experienced its fair amount of volatility as Washington continues to send investors on a roller coaster fiscal cliff ride. Equities were trading lower on the day, but House Speaker John Boehner said he is optimistic that a deal would be reached. President Obama also added hope by urging Congress to complete a deal by Christmas.

By the end of the day, shares of the SPDR Gold Trust (NYSEARCA:GLD) closed 1.28 percent lower, while the iShares Silver Trust (NYSEARCA:SLV) dipped 0.94 percent. However, gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both jumped more than 1.0 percent. Silver names such as Silvercorp Metals (NYSE:SVM) and Hecla Mining (NYSE:HL) also logged gains in excess of 1.0 percent.

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Disclosure: Long EXK, AG, HL, PHYS

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