Gold and Silver Climb Higher as Equities Sink Again
By Eric McWhinnie | November 9, 2012 8:31 AM EST
Both precious metals logged gains, despite central banks in Europe and England keeping main interest rates unchanged. The European Central Bank decided to keep its rate at 0.75 percent, while the Bank of England is holding steady at 0.5 percent. The BOE also said it will not be adding to its 375 billion pound quantitative easing program.
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While the ECB did not lower its interest rate, the central bank’s president Mario Draghi continued to jawbone markets about bond buying. “We are ready to undertake” Outright Monetary Transactions, “which will help to avoid extreme scenarios,” he said at a press conference in Frankfurt, according to Bloomberg. “The risks surrounding the economic outlook remain on the downside” and underlying inflation pressures “should remain moderate.”
By the end of the day, the Dow Jones Industrial Average closed 121 points in the red, while the S&P 500 and Nasdaq dropped more than 1.0 percent. However, the SPDR Gold Trust (NYSEARCA:GLD) gained nearly 1.0 percent, while the iShares Silver Trust (NYSEARCA:SLV) increased 1.8 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Agnico Eagle Mines (NYSE:AEM) both closed more than 1 percent higher. Meanwhile, First Majestic Silver (NYSE:AG) and Hecla Mining (NYSE:HL) jumped 3.4 percent and 2.5 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS