Gold and Silver Bounce Off Lows
Greek Prime Minister George Papandreou surprised European leaders Monday when he called for a referendum on the new aid package for Greece, putting austerity measures and potentially the nation’s membership in the euro zone to a popular vote. The referendum will allow Greek citizens to vote on whether or not to support the debt deal and program of austerity measures in exchange for foreign aid. Greeks have been voicing their disapproval of heavy spending cuts since the first bailout package was established, often organizing mass strikes that have shut down many public sector services, including transportation. Some protests in Athens have turned to violence.
The markets did not take the news well, as the Dow (NYSE:DIA) suffered another triple-digit move to the downside. Gold and silver equities also declined during the day, but are paring losses as reports are saying that the Greek referendum are basically dead. The Market Vectors Gold Miners ETF (AMEX:GDX) hit an intra-day low of $56.03, but is trading slightly above $59 before the close. The junior gold miners (AMEX:GDXJ) are still down nearly 1% for the day. AngloGold (NYSE:AU) and Harmony Gold (NYSE:HMY) edged higher as Deutsche Bank (NYSE:DB) initiated a Buy on both stocks. Silver miners (NYSE:SIL) Endeavour Silver (AMEX:EXK) and First Majestic (NYSE:AG) climbed 1.2% and .12% higher, respectively.
Investors may continue to turn to precious metals as the financial markets and regulators continue to fail investors. It is now being discovered that hundreds of millions of dollars in customer money has gone missing from MF Global (NYSE:MF) in the last few days, prompting an investigation into the brokerage firm, which just yesterday filed for Chapter 11 bankruptcy protection.
Investing Insights: How Will Precious Metals React to the EU Bailout Plan?