Gold (GLD) and Silver (SLV) Climb Higher As China Purchases Record Amount

On Wednesday, gold (NYSEARCA:GLD) futures for February delivery increased $8.10 to settle at $1,639.60 per ounce, while silver (NYSEARCA:SLV) futures gained 8 cents to settle at $29.89.

China’s gold imports from Hong Kong reached a record level in November.  According to the Hong Kong government, Mainland China purchased 102,779 kilograms from Hong Kong, which is a 20 percent increase from October, and an all-time high.

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China’s imports “are extremely bullish,” Bernard Sin, the head of currency and metal trading at bullion refiner MKS Finance SA in Geneva, explained. “We see a lot of investors rebuilding their gold portfolios again. People are still very concerned about Europe.”  The physical buying data comes as a relief to the precious metal community, as overblown fears of a bubble surfaced throughout the media as gold declined in the latter part of 2011.  “The dip in prices could not have come at a better time for the Chinese buyers,” James Cordier, the founder of, said. “Gold is regaining its safe-haven qualities.”

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) gained .36 percent, while the iShares Silver Trust (NYSEARCA:SLV) edged .07 percent higher.  Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) jumped almost 1 percent.  Meanwhile, First Majestic (NYSE:AG) gained 1.14 percent, and Silver Wheaton Corp. (NYSE:SLW) dipped .45 percent.

The big mover of the day was Hecla Mining (NYSE:HL), which saw shares plummet more than 20 percent.  The company announced that the Mine Safety and Health Administration ordered the Silver Shaft at the Lucky Friday mine in Idaho to close, in order to allow for the removal of built-up material in the shaft.  As a result, Hecla reduced its production outlook for 2012 from 9.5 million ounces to 7 million ounces.

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“While we are disappointed with this order and are considering what action we might take, work has already begun to resume production as quickly as possible,” said Phil Baker, Hecla’s President and Chief Executive Officer. “The Lucky Friday mine is a world-class mine that we see producing silver for decades to come. Hecla and the Lucky Friday mine have faced challenges in the past and we will once again overcome them.”

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To contact the reporter on this story: Eric McWhinnie at

To contact the editor responsible for this story: Damien Hoffman at