Precious metals recovered the large majority of their losses in mid-day trading on Tuesday, while the broader equity markets turned sharply higher.
The broad-based rally coincided with the question and answer portion of Ben Bernanke’s testimony to Congress. However, while one might have guessed that the markets’ strength was driven by hints that QE3 is looming, the Fed Chairman did not provide such indications. Instead, Bernanke mainly answered questions on the Libor scandal and the challenging fiscal situation in which the U.S. finds itself.
Nevertheless, the S&P 500 Index jumped from an intra-day low of 1,345.07 this morning to as high as 1,364.17. Risk aversion tumbled as well, with the CBOE Volatility Index (VIX) sliding from 17.46 to 16.09.
While gold and silver shares bounced back from their lows of the day, the sector remained firmly in the red. The Philadelphia Gold & Silver Index (XAU) rose from 145.21 this morning to 148.19 this afternoon, leaving it down by 1.0%. Notable decliners among XAU components included Kinross Gold (KGC) and Pan American Silver (PAAS) – which fell by 2.4% to $8.13 and by 1.2% to $14.31 per share, respectively.
As for the metals themselves, COMEX gold futures climbed from as low as $1,571.00 to settle down by just $2.10, or 0.1%, at $1,589.50 per ounce. Silver futures rose from $26.72 to near unchanged at $27.29 per ounce.
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