Precious Metals Rebound on Italian Election Fears
By Eric McWhinnie | February 26, 2013 8:30 AM EST
On Monday, gold (NYSEARCA:GLD) futures for April delivery, the most active contract, gained $13.80 to settle at $1,586.60 per ounce, while silver (NYSEARCA:SLV) futures for March jumped 53 cents to close at $28.99.
Both precious metals rallied, despite hedge funds cutting bullish bets on gold by the most in about five years. According to U.S. Commodity Futures Trading Commission data, money managers and other large speculators decreased net-long positions in gold contracts and options by 40 percent.
The Italian election appears to be providing support for gold and silver, as exit polls raised fears that the country may not have a stable government. Projections show former Italian Premier Silvio Berlusconi’s center-right party ahead in the Senate, which could threaten austerity measures and bring the euro zone financial crisis back into focus. Earlier readings had Pier Luigi Bersani’s center-left party leading the field.
Christopher Vecchio, currency analyst at DailyFX, explains, “Unlike in the United States or in other European countries, the Italian Senate and the lower house share power; so if Bersani can’t generate a coalition in the Senate, Italy essentially is ungovernable.”
By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) both gained nearly 1 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) jumped 1.64 percent and 2.41 percent, respectively. Meanwhile, silver names such as Pan American Silver (NASDAQ:PAAS) and Endeavour Silver (NYSE:EXK) surged 3.98 percent and 5.84 percent, respectively.
If you would like to receive professional analysis on miners and other precious metal investments, we invite you to try our premium service free for 14 days.
Disclosure: Long EXK, AG, HL, PHYS
Most Popular Slideshows
- 2014 MTV Video Music Awards: Full List Of Winners, Miley Cyrus ‘Wrecking Ball’ Bags Video Of The Year [PHOTOS]
- Kate Middleton’s Mom Accused Of Being A Social Climber, Prince George Not Seen By Relatives
- Kate Middleton First Official Solo Trip: Details For Malta Tour Revealed [PHOTOS]
- Manny Pacquiao Vs. Chris Algieri World Tour Kick Off Press Conference In Macau [PHOTOS]
Join the Conversation
- Worldwide Appetite for Gold Slumps 16% in 2Q 2014 – WGC
- Gold in China: 127-Tonne Gold Reserves Tapped in Xinjiang
- Global Markets Overview – July 15, 2014
- Honduran Gold Mine Caves in; 8 Rescued, 3 Remain Trapped (PHOTOS)
- Chinese Govt Tightens Control on Gold to Curb Imports, Could Drop 400T from 2013 – Report
- Apple on iPhone 6 Release Date One Week After September 9 Despite Display Shortage Starting $800
- James Foley Video Had A Change Of Actor – Expert Points Out
- Canada Concerned About Russia’s Military Expansion in Arctic
- Why Moto X is Not the Best Smartphone to Purchase Now?
- Nexus 6 Release Date Will Intro Android 5.0 aka Lemon Meringue Pie with Killer Specs & Features
- Hundreds of Men Rape Teen for Three Years
- Samsung Galaxy S5 Mini vs. LG G3 S (aka LG G3 Beat, LG G3 Mini) – Specs, Features And Price Showdown