Gold and silver prices were falling hard Wednesday morning following renewed
anxiety over euro zone leaders ability to agree on sufficiently strong treaty
reforms and a debt solution, as well as the results of the last scheduled 2011
meeting of the U.S. Federal Reserve Boards Open Market Committee. Spot gold was
down more than 1.8% at 10:50 a.m., with a bid price of $1,601.10 per ounce and
an ask price of $1,602.10, having traded as high as $1,632.50 and as low as
$1,598. The London afternoon reference price fix came in at $1,603, according to
Kitco market data . The price of gold has now fallen to its 200-day moving
average support level, which BullionVault puts at $1,610 an ounce. The 200-day
MA support held repeatedly during the volatile market downturn during
September-October, one market analyst noted. A breach would signal a reversal in
trend and a bear market in gold. We have the beginnings of a real bear market,
and the death of a bull (in gold), said Dennis Gartman, who advised readers of
his investment newsletter to avoid buying gold back in August. Spot silver was
down a whopping 6.2% Wednesday morning, bid at $28.94 per ounce with an ask
price of $29.04. The morning high as of time of writing was $30.25 and the low
was $28.74. Wednesdays reference price was set at $29.92 in the London a.m. A
weaker euro and stronger U.S. dollar isnt supportive of higher precious metals,
or share prices, it appears, nor was word from the U.S. Federal Reserve
yesterday and Europe today. For better or for worse, the markets were
disappointed that the FOMC shied away from any additional easing of monetary
policy. Italy had to pay a coupon rate of nearly 6.5% to sell all the five-year
bonds it wanted to. Also, German leaders rebuffed another call by euro zone
members for the European Central Bank to intervene decisively to stop the crisis
escalating, according to Reuters . Turning to stock exchange trading, gold and
silver trusts were falling fast and hard. The SPDR Gold Trust (NYSE: GLD ) was
showing losses of more than 2.7%. The iShares Gold Trust (NYSE: IAU ) was down
around 2.9%. The iShares Silver Trust (NYSE: SLV ) was falling sharply, down
between 6% and 6.6%. Gold and silver mining ETFs were following suit. The Market
Vectors Gold Miners ETF (NYSE: GDX ) was down about 4.6%. The Market Vectors
Junior Gold Miners ETF (NYSE: GDXJ ) fell about 5.25%. The Global X Silver
Miners ETF (NYSE: SIL ) was down some 6.2%. Gold mining shares were showing
sharp losses across the board. Agnico-Eagle Mines (NYSE: AEM ) was showing
losses of some 4.5%. Barrick Gold (NYSE: ABX ) was down around 4.5%. Goldcorp
(NYSE: GG ) was showing losses of around 3.5%. Newmont Mining (NYSE: NEM ) was
around 3.25%. NovaGold Resources (AMEX: NG ) was more than 5.8% lower. Silver
mining shares were taking it on the chin as well. Coeur dAlene Mines (NYSE: CDE
) was moving lower, down nearly 5.8%. Hecla Mining (NYSE: HL ) was down more
than 8.5%. Pan American Silver (NASDAQ: PAAS ) was down more than 6.2%. Silver
Wheaton (NYSE: SLW ) was showing losses of 6.6%. Silver Standard Resources
(NASDAQ: SSRI ) was down more than 8%. As of this writing, Andrew Burger did not
own a share in any of the aforementioned stocks. Adrian Ash of BullionVault
contributed to this report.
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