Gold & Silver Surge as the Dow Falls Over 100 Points

On Tuesday, gold (NYSE:GLD) futures for December delivery jumped $48.10 to settle at $1,700.40 per ounce, while silver (NYSE:SLV) futures surged $1.40 to settle at $33.05.  Gold and silver look to be regaining their safe-haven status as the Dow (NYSE:DIA) fell more than 100 points.

There was a wide variety of factors affecting gold and silver today.  New reports indicated that Wednesday’s meeting of European finance ministers had been cancelled.  Investors are growing tired of the Eurozone drama.  “We have no confidence at all that the various proposed strategies will provide any effective fix for Europe’s ills,” said Ian Gordon, an analyst at investment bank Evolution Securities in London.  To make matters worse, FT reported that “Italy’s prime minister was fighting on Tuesday night to stave off a collapse of his centre-right coalition government over European Union demands for more concrete economic reform measures in time for Wednesday’s highly anticipated summit of eurozone leaders.”

While the US dollar (NYSE:UUP) index remained mostly flat, the Consumer Confidence Index dropped to its lowest level in two and half years.  The Conference Board reported that consumer attitudes fell to 39.8 in October, from an upwardly revised 46.4 in September.  Economists were expecting consumer confidence to come in at 46.

The surge in gold and silver led to big gains in precious metal (NYSE:DBP) equities.  Gold miners (AMEX:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both climbed nearly 3% higher in afternoon trading.  Gold also received attention from a recent gold critic.  Last week, Dennis Gartman wrote that gold is suffering “very real damage.”  Now, he says that he is adding to his gold position by buying gold priced in dollars, pounds, and euros.  He said, “The authorities have no choice but to inflate their way out of the morass that they’ve found themselves falling into and that shall mean the diminution of currencies generally and the advancement of gold as the only currency not diminished.”

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Silver miners (NYSE:SIL) also performed well today.  First Majestic (NYSE:AG) climbed nearly 4% higher, and Endeavour Silver (NYSE:EXK) surged more than 6%.  Silvercorp Metals (NYSE:SVM) declined more than 2% on the day, but could represent profit taking.  Yesterday, shares of Silvercorp surged 18% after it received a report from KPMG Forensic Inc. backing its accounting practices in China (NYSE:FXI) and North America.  The Vancouver-based miner had preciously been accused of accounting fraud by short-sellers.

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