With less than a week to go before the Christmas and year-end holidays, gold
was moving between smallish gains and losses Monday morning, and silver was down
sharply early Monday as U.S. home builder confidence rose for the third
consecutive month, bringing the HMI to its highest level since May 2010,
according to the December NAHB/Wells Fargo Housing Market Index. Europes credit
crunch continues to ripple outward, straining Eastern European economies, which
might need to draw on existing IMF credit facilities to balance ongoing
withdrawals from Western banks, according to a Bloomberg report. Meanwhile,
European bond market participants are re-jiggering their portfolios to reflect
the latest changes in the collateral that the European Central Bank is willing
to accept as security against short-term bank loans. Spains two-year bonds had a
strong bid, rising for the seventh consecutive day. Spot gold was down nearly
0.5% at 10:55 a.m., with a bid price of $1,591.60 per ounce and an ask price of
$1,592.60, having traded as high as $1,608 and as low as $1,588.40. The London
afternoon reference price fix came in at $1,598, according to Kitco market data
. Spot silver was down more than 2.6%, bid at $28.95 per ounce with an ask price
of $29.05. The morning high as of time of writing was $29.42, and the low was
$28.78. Mondays reference price was set at $28.78 in the London a.m., down a
buck from last Fridays reference price fixing. Gold bullion prices had rallied
0.5% to $1,607 an ounce by lunchtime in London, while silver bullion prices rose
to $29.36 just prior to the New York markets open but they still were down 1.2%
from last weeks close, according to BullionVaults London Gold Market Report .
Gold bullion will drop below $1,500 per ounce, according to a Reuters poll of 20
hedge fund managers, economists and traders. Youre looking at Euro weakness,
rather than anything else, as the driving force behind the sell-off (in gold
bullion last week), said David Jollie, analyst at Mitsui Precious Metals.
Whatever your (longer-term) view, you have to ask what the chances are of making
money by the end of the year that says to a lot of people that this is not a
market to get longer in. Vancouvers Eldorado Gold (NYSE: EGO ) agreed to buy
European Gold Fields for about $2.4 billion in cash and shares, a 10% premium to
EGFs closing price on Dec. 16, and 31% higher than its share price on Dec. 5,
when EGF announced that it had received offers, according to Bloomberg . EGO
shares were down about 10.5% on the news, while Toronto Stock Exchange-listed
European Gold Fields shares were down around 1%. In exchange trading, gold
trusts were lower, and the iShares Silver Trust (NYSE: SLV ) was sharply lower.
The SPDR Gold Trust (NYSE: GLD ) was showing losses of around 0.25%. The iShares
Gold Trust (NYSE: IAU ) was down about 0.3%. The iShares Silver Trust (NYSE: SLV
) was nearly 2.7% lower. Gold and silver mining ETFs were showing losses of more
than 1%. The Market Vectors Gold Miners ETF (NYSE: GDX ) was moving sharply
lower, down nearly 1.6%. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ )
was down about 1.4%. The Global X Silver Miners ETF (NYSE: SIL ) was down nearly
1.2%. Gold mining shares were moving lower across the board to varying degrees.
Agnico-Eagle Mines (NYSE: AEM ) was showing losses of nearly 0.5%. Barrick Gold
Corp. (NYSE: ABX ) was down less than 0.1%. Goldcorp (NYSE: GG ) was showing
losses of more than 2%. Newmont Mining Corp. (NYSE: NEM ) was nearly 0.5% lower.
NovaGold Resources (AMEX: NG ) was between 2.6% and 2.9% lower. Silver mining
shares also were sustaining losses. Coeur dAlene Mines Corp. (NYSE: CDE ) was
moving lower, down nearly 1.9%. Hecla Mining (NYSE: HL ) was down more than
2.5%. Pan American Silver Corp. (NASDAQ: PAAS ) was nearly 1% lower. Silver
Wheaton Corp. (NYSE: SLW ) was showing losses of about 1.8%. Silver Standard
Resources Inc. (NASDAQ: SSRI ) was down more than 3.5%. As of this writing,
Andrew Burger did not hold a position in any of the aforementioned securities.
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