Gold and Silver Hold Steady After Spain Downgrade

  Google+  Twitter | + More Articles
  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

On Thursday, gold (NYSEARCA:GLD) futures for December delivery increased $5.50 to settle at $1,770.60 per ounce, while silver (NYSEARCA:SLV) edged 3 cents lower to close at $34.08.

In the wake of more eurozone drama and U.S. dollar weakness, both precious metals are managing to hold onto their gains made over the past few months. Ratings agency Standard & Poor’s cut Spain’s credit rating to one notch above junk status. It is the third time this year that the country has been downgraded.

“In our view, the capacity of Spain’s political institutions (both domestic and multilateral) to deal with the severe challenges posed by the current economic and financial crisis is declining,” S&P said in a statement. The firm also maintains a negative outlook on Spain.

The greenback index also declined on Thursday as the Commerce Department reported that the U.S. trade deficit widened 4.1 percent to $44.2 billion in August. Exports dropped 1 percent to $181.3 billion, with industrial supplies leading the decline.

Don’t Miss: Gold & Silver: Protection Against the Fed’s Punch Bowl

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased 0.30 percent, while the iShares Silver Trust (NYSEARCA:SLV) traded slightly lower. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) jumped 2.3 percent and 0.95 percent, respectively. Silver names such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) gained 0.50 percent and 0.25 percent, respectively.

Endeavour recently encountered an illegal work stoppage near its El Cubo mine located in the state of Guanajuato, Mexico. It prevented company management and personnel from accessing certain facilities held under lease. However, the miner has announced that this has been resolved.

“The workers involved have ceased their work stoppage and blockade and agreed to go back to work on the afternoon shift today (Wednesday),” Endeavour explains in a press release. “Company management and representatives from the Mexican Ministry of Labour met with the non-union workers blocking the Las Torres leased assets late yesterday and heard their complaints. Most of their issues related the recent abrupt actions of their previous employer, an employment outsourcing company used by the previous owner of El Cubo, Aurico Gold, which put their jobs and their accrued benefits at risk.”

Investor Insight: Gold: A Put Against the Idiocy of the Political Cycle

If you would like to receive professional analysis on miners and other precious metal investments, we invite you to try our premium service free for 14 days.

Disclosure: Long EXK, AG, HL, PHYS

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business