Gold & Silver Decline as the Euro Dips Below $1.30
By Eric McWhinnie | May 8, 2012 12:45 AM IST
Both precious metals turned lower as the U.S. dollar climbed higher on the back of a weaker euro, which fell below $1.30 for the first time since January. Over the weekend, voters in France elected Francois Hollande from the Socialist party, placing austerity plans in jeopardy. Since the start of his campaign for president, Hollande said he would aim to renegotiate the European fiscal treaty that leaders agreed upon last year.
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“The euro will likely continue to tread on a weaker footing, pulled down by an unclear outlook for the future,” said Sumino Kamei, senior analyst at the Bank of Tokyo-Mitsubishi UFJ, according to WSJ. “This will be a week of risk-aversion.”
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In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) edged .32 percent lower, while the iShares Silver Trust (NYSEARCA:SLV) declined .89 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) fell .05 percent and 2.20 percent, respectively. Meanwhile, silver investments such as Silver Wheaton (NYSE:SLW) and First Majestic (NYSE:AG) dropped more than 3 percent.
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Disclosure: Long EXK, AG, HL, PHYS