Gold (GLD) and Silver (SLV) Decline on Greek Tragedy
Although the main Greek party leaders agreed to a last-minute deal on austerity, the deal and new conditions imposed by Europe must still be approved by Parliament this weekend, and the third member of the governing coalition has made it clear he will not support the deal. Jean-Claude Juncker, prime minister of Luxembourg and head of the Euro-group, explained that, “despite the progress achieved over the last days,” the Euro-group needed more assurances from Athens before a bailout could be paid out.
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Three major elements must still be resolved, Juncker said. The first is that Parliament approve the reform package this weekend. Secondly, Greece’s political leaders must pledge they will continue to implement the measures after elections in April. Finally, Greece must find a further 325 million euros in “structural expenditure” cuts for 2012.
With no solution in place for Greece, there was a broad sell-off in markets as the U.S. dollar (NYSE:UUP) climbed higher. In afternoon trading, precious metal investments such as the SPDR Gold Trust (NYSEARCA:GLD) fell .73 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined 1.16 percent. Gold miners (NYSEARCA:GDX) Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) both fell more than 2 percent. Silver miners (NYSEARCA:SIL) such as First Majestic (NYSE:AG) fell 1.7 percent, while Endeavour Silver (NYSE:EXK) declined 3.4 percent.
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