Gold, Silver Shares Retreat, XAU Slides 1.7%

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By jturbin | November 28, 2012 7:45 AM EST

Gold Alert

Gold and silver stocks extended their losses Tuesday afternoon alongside the broader equity markets amid rising concerns over the U.S. fiscal cliff situation.  The Philadelphia Gold & Silver Index (XAU) fell by 1.7% to 171.05 while the S&P 500 Index dropped by as much as 0.5% to 1,399.00.

Within the sector, widely-traded names in the red included XAU components Gold Fields (GFI), IAMGOLD (IAG), and Pan American Silver (PAAS).  Shares of GFI slipped by 2.8% to $11.84, IAG by 2.1% to $11.87, and PAAS by 1.2% to $19.11.

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Equities as a whole headed south after Harry Reid, the U.S. Senate House Majority leader, stated that policymakers have made “little progress” in negotiations aimed at avoiding the fiscal cliff – the billions in automatic spending cuts and tax increases scheduled to begin in 2013.

Precious metals declined as well, with COMEX gold futures for December delivery settling down by $7.30, or 0.4%, at $1,742.30 per ounce.  Silver futures largely mirrored the yellow metal, as the COMEX December contract closed with a loss of $0.16, or 0.5%, at $33.98 per ounce.

Commenting on the outlook for the gold market, analysts at HSBC contended that “With much trading activity gravitating around the $1,750 an ounce level, we anticipate the expiration will be modestly price-positive for gold. Beyond that, we believe gold and silver prices will tend toward consolidation, as investors await further developments on the U.S. fiscal-cliff negotiations.”

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This article is contributed by Gold Alert and does not represent the views or opinions of International Business Times.

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