Central Bank Willing to Do More; Precious Metals Lack Momentum

Gold

On Wednesday, gold (NYSEARCA:GLD) futures for December — the most active contract — declined $2.80 to close at $1,268.40 per ounce, while silver (NYSEARCA:SLV) futures fell 34 cents to finish at $20.44. Major exchange-traded funds, like the SPDR Gold Trust and iShares Silver Trust, finished the day mixed.

Gold and silver continued to struggle, even as the European Central Bank said it could try negative interest rates or asset purchases to boost inflation. “If our mandate is at risk we are going to take all the measures that we think we should take to fulfill that mandate. That’s a very clear signal,” ECB executive board member Peter Praet told The Wall Street Journal.

The U.S. Dollar Index, which compares the greenback in a basket against six other flat currencies, with the euro carrying the most weight, rose to as high as 81.28 but closed in the red.

By the end of the trading day Wednesday, shares of the SPDR Gold Trust (NYSEARCA:GLD) edged 0.3 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) dropped 1.1 percent. Gold miners (NYSEARCA:GDX) Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both gained about 0.4 percent. However, shares of Endeavour Silver (NYSE:EXK) and Silver Wheaton (NYSE:SLW) both jumped 1.7 percent.

Although the price of silver has fallen dramatically over the past two years, record demand is being seen in some areas of the market. According to the U.S. Mint, sales of American Eagle silver coins have already hit almost 40.2 million ounces so far this year, a fresh all-time high. The previous record was 39.9 million ounces in 2011.

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Disclosure: Long EXK, AG, HL, PHYS

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