The U.S. Federal Reserve has no plans to give money to the International Monetary Fund to bolster the European bailout fund, despite reports suggesting the contrary, says U.S. Treasury Secretary Timothy Geithner.
Investor Insights: Are Gold and Silver Waiting on Another Catalyst?
Speaking after a meeting on Tuesday with his German counterpart, Finance Minister Wolfgang Schaeuble, Geithner said that he is “very encouraged” by the reforms taken so far by European nations, but that reports citing anonymous sources saying the Fed would take part in a special fund for countries trying to control their debt is “not accurate.” Geithner is on a three-day trip to Germany, France, and Italy, “to emphasize how important it is for the United States and the global economy as a whole” for Europe to succeed, he said. The U.S. continues to support a constructive role by the International Monetary Fund in efforts to build a stronger Europe, said Geithner, though it has no intention at this time to contribute monetarily to those efforts.
Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX), Newmont Mining (NYSE:NEM) and Yamana Gold (NYSE:AUY) traded more than 2% higher in afternoon trading. Silver miners (NYSEARCA:SIL) also participated in the rally with Endeavour Silver (NYSE:EXK) and Silver Wheaton Corp. (NYSE:SLW) jumping 3.80% and 3.25%, respectively. Meanwhile, the SPDR Gold Shares ETF (NYSEARCA:GLD) edged .50% higher, as the iShares Silver Trust (NYSEARCA:SLV) gained 2.74%.
The big winner of the day was Hecla Mining Co. (NYSE:HL), the largest silver miner in the United States. Shares gained more than 9% as option activity attracted the attention of investors. More than 50,000 in-the-money contracts were traded in just the first hour of trading. Shares currently pay a silver-linked dividend of 1.2%.
If you would like to receive more professional analysis on equity miners and other precious metal investments, we invite you to try our premium service free for 14 days.