Gold and Silver Pause, Central Banks Remain Net Buyers of Gold

On Friday, gold (NYSEARCA:GLD) futures for December delivery declined $9 to settle at $1,756.10 per ounce, while silver (NYSEARCA:SLV) futures edged 41 cents to settle at $34.08.

World leaders have failed to agree on increasing the resources of the International Monetary Fund, a move that European governments hoped would allow them to tap more foreign aid to help in this crisis-fighting efforts.  Speaking from a Group of 20 summit in Cannes, France, Germany Chancellor Angela Merkel said governments are awaiting further details on Europe’s week-old rescue package before committing funds. Their reluctance to immediately channel funds to the euro zone reflects their frustration with Europe’s failure to put an end to the crisis.

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Dow Jones reports, “World leaders may mandate the International Monetary Policy to print more of its special currency to help solve the euro zone crisis, according to several people familiar with the matter.  Asking the IMF to print more of its Special Drawing rights, essentially an IOU that countries can exchange for cash, is one of the ways the Group 20 industrialized and developing countries is considering supplementing European efforts to stem a debt crisis threatening to spark a global financial meltdown and another recession.”

The US dollar (NYSE:UUP) received a bounce on the latest euro drama, while it was a volatile day for gold and silver plays.  Barrick Gold (NYSE:ABX) fell 1.15%, while Yamana Gold (NYSE:AUY) gained nearly 1% in afternoon trading.  AngloGold (NYSE:AU) and Randgold Resources (NASDAQ:GOLD) also fell by nearly 1%. Silver miners (NYSEARCA:SIL) such as First Majestic (NYSE:AG) bounced around in a range between $17.42 and $18.28. Meanwhile, Endeavour Silver (NYSE:EXK) and Great Panther (AMEX:GPL) edged higher on the day.

Although gold is volatile at times, central banks continue to invest in the shiny metal.  GoldCore reports, “According to data from the IMF, central banks continue to be significant net buyers of gold. Mexico has added most to its reserves, with a net 83.7T of gold between January and September 2011, followed by Russia, which has added 59.3T this year, and Thailand, which has added 52.9T.”

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