Congressional Gridlock, EU Debt Fears Hammer Gold, Silver Prices

The confluence of coincidences are hitting global stock markets Monday morning.
Rather than seeing safe-haven demand, gold and silver were heading downward
right along with them. A dysfunctional U.S. Congress unable to agree on a budget
package to avoid deep across-the-board budget cuts compounded fears of European
sovereign debt contagion. Spot gold was nearly 1.2% lower at 10 a.m. Monday,
while spot silver was down more than 3.8%. Shares of Hecla Mining (NYSE: HL )
were down some 5% despite management reaffirming that its 2011 silver, gold and
metals production targets wont be affected by suspending operations at its Lucky
Strike mine in northern Idaho following an accident last week that resulted in
the death of one young miner working for a contractor. A raft of U.S. economic
data is due out this week that, if positive, could do a lot to stabilize clearly
shaken markets. The National Association of Realtors reported that October
existing-home sales rose 1.4% and are 13.5% above a year ago. The number of
homes on the market continued to decline in October, falling 2.2%, an
eight-month supply at the current pace. Thirty-year fixed mortgage rates fell to
an all-time low of 4.07% , according to Freddie Mac. Spot gold was bid at
$1,704.20 per ounce, with an ask price of $1,705.20, having traded at a high of
$1,714.79 and a low of $1,698.50. The morning reference price fixing was set at
$1,704, according to Kitco market data . Spot silver was bid at $31.17 per ounce
with an ask price of $31.27. The morning high as of time of writing was $31.51,
and the low was $30.89. Mondays reference price was set at $30.90 in the London
a.m., $1.25 an ounce lower than last Fridays reference price. Gold and silver
trusts were losing value early Monday. The SPDR Gold Trust (NYSE: GLD ) was
around 1.15% lower. The iShares Gold Trust (NYSE: IAU ) was about 1.25% lower.
The iShares Silver Trust (NYSE: SLV ) was down nearly 3.4%. Gold and silver
mining ETFs also were down sharply. The Market Vectors Gold Miners ETF (NYSE:
GDX ) was down around 2.4%. The Market Vectors Junior Gold Miners ETF (NYSE:
GDXJ ) was some 4.5% lower. The Global X Silver Miners ETF (NYSE: SIL ) was
nearly 5% lower. Shares of gold miners were heading south as well. Agnico-Eagle
Mines (NYSE: AEM ) was nearly 4.3% lower. Barrick Gold Corp. (NYSE: ABX )
dropped about 2%. Goldcorp (NYSE: GG ) was down nearly 2.7%. Newmont Mining
Corp. (NYSE: NEM ) was around 0.9% lower. NovaGold Resources (AMEX: NG ) was
showing losses of around between 3.8% and 4.1%. Silver miners shares also were
falling, with Hecla Mining showing steep losses. Coeur dAlene Mines Corp. (NYSE:
CDE ) was around 3.5% lower. Hecla Mining was down between 4.8% and 5.2%. Pan
American Silver Corp. (NASDAQ: PAAS ) was some 2.6% lower. Silver Wheaton Corp.
(NYSE: SLW ) was about 3.3% lower. Silver Standard Resources Inc. (NASDAQ: SSRI
) was down around 3%. As of this writing, Andrew Burger did not hold a position
in any of the aforementioned stocks.