Gold and Silver Fall as Dollar Rises Against Euro and Yen (GLD, SLV)

On Tuesday, gold (NYSEARCA:GLD) futures for April delivery fell $7.20 to settle at $1,717.70 per ounce, while silver (NYSEARCA:SLV) futures declined 37 cents to close at $33.35.  It was the third consecutive session of declines for gold.

The U.S. dollar (NYSE:UUP) climbed higher as downgrades swept through Europe.  Moody’s Investors Service downgraded the credit ratings of six European nations overnight and warned it may soon cut the triple-A credit ratings of France, Britain, and Austria as well.

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Citing growing risks from Europe’s sovereign debt crisis, Moody’s cut the ratings of Italy, Portugal, Malta, Slovakia, and Slovenia by one notch, while lowering Spain’s rating by two notches and putting Austria, France, and the United Kingdom on ‘outlook negative,’ implying a 30 percent chance they will lose their AAA credit ratings within 18 months.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined .45 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell .76 percent.  Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) both dropped nearly 2 percent, while Barrick Gold (NYSE:ABX) fell 1.39 percent.  Silver miner (NYSEARCA:SIL) Endeavour Silver (NYSE:EXK) decreased 3 percent.  First Majestic Silver (NYSE:AG) and Hecla Mining (NYSE:HL) fell 1.9 percent and 1.8 percent, respectively.

The dollar also gained strength from a weakening Japanese yen, after the Bank of Japan surprised the markets with additional easing.  The central bank announced it will increase its easing efforts by 10 trillion yen, bringing the total to about 65 trillion yen.  Compared to the yen, the dollar reached its highest level since November.

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To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com