Gold and Silver Bounce Higher After Sharp Pullback
The bounce in precious metals comes a day after gold and silver both suffered their worst single day decline year-to-date. Although Ben Bernanke failed to announce an official QE3 program to Congress this week, many investors saw the pullback as a buying opportunity, as nothing fundamentally has changed. Ultra-low interest rates and expanding central bank balance sheets continue to make gold and silver an attractive investment.
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“In our view, the recent correction is temporary and does not question the mid- or long-term upward path of gold,” BNP Paribas analyst Anne-Laure Tremblay explained. “We may test $1,700 an ounce, but I would be surprised if we broke this level durably.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) gained 1.8 percent, while the iShares Silver Trust (NYSEARCA:SLV) jumped 2.6 percent. Gold miners (NYSEARCA:GDX) such as Newmont Mining Corp. (NYSE:NEM) and Barrick Gold (NYSE:ABX) edged about .50 percent higher, while Goldcorp Inc. (NYSE:GG) increased 2.4 percent. Meanwhile, silver investments such as Silver Wheaton (NYSE:SLW) and Endeavour Silver (NYSE:EXK) gained more than 1 percent.
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