Gold and Silver Hold Steady as Sequester Begins

On Friday, gold (NYSEARCA:GLD) futures for April delivery, the most active contract, dropped $5.80 to settle at $1,572.30 per ounce, while silver (NYSEARCA:SLV) futures for March edged 6 cents higher to close at $28.45. It was gold’s third consecutive trading day in the red.

Both precious metals were relatively stable, despite the U.S. dollar climbing higher. The automatic spending cuts, known as the sequester, are set to begin today with no truce being called between Democrats and Republicans.

Speaking about the inability to get a deal done, President Obama explains, “I know that this has been some of the conventional wisdom that’s been floating around Washington that somehow, even though most people agree that I’m being reasonable, that most people agree I’m presenting a fair deal, the fact that they don’t take it means that I should somehow, you know, do a Jedi mind meld with these folks and convince them to do what’s right.”

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) dipped 0.30 percent, while the iShares Silver Trust (NYSEARCA:SLV) increased 0.10 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) fell 2.8 percent and 1.3 percent, respectively. Silver miners (NYSEARCA:SIL) such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) dropped 1.6 percent and 3.8 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS