Both precious metals declined as political rhetoric over the fiscal continues to dominate headlines. In an interview on Bloomberg Television, President Barack Obama said, “We have the potential of getting a deal done.” However, he also added, “We’re going to have to see the rates on the top 2 percent go up, and we’re not going to be able to get a deal without it.” The statement shows that both sides of the aisle still have some work to do before reaching an agreement.
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Some analysts believe that a failure to prevent the fiscal cliff will send gold prices lower, as everything in the market will selloff in the short-term. However, long-term bullish trends like ultra-low interest rates still remain in place for precious metals. Australia’s central bank cut interest rates by 0.25 percent to 3.0 percent on Tuesday, matching the lowest level on record since 2009.
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) fell about 1.0 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined 2.0 percent. Gold miners (NYSEARCA:GDX) performed better, with Barrick Gold (NYSE:ABX) and Goldcorp (NYSE:GG) both jumping more than 1.0 percent. First Majestic Silver (NYSE:AG) and Silver Wheaton (NYSE:SLW) also climbed higher.
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Disclosure: Long EXK, AG, HL, PHYS