Gold, Silver Lower as Italian Bond Yields Cause Jitters

Gold and silver were moving lower along with stocks Thursday morning despite a
positive report on December unemployment and private sector hiring, along with
healthy bidding at an auction of French treasury bonds. Disturbingly, the yield
on Italys benchmark 10-year bond moved back above the key 7% level , according
to a Wall Street Journal report. Spot gold was trading 0.5% lower Thursday
morning, with a bid price of $1,604.40 and an ask price of $1,605.40. Spot gold
traded as high as $1,613.50 per ounce and as low as $1,596. The London afternoon
reference price fix came in at $1,599, $14 lower than Wednesdays price fix,
according to Kitco market data . Spot silver was down some 0.86%, bid at $28.91
per ounce with an ask price of $29.01. The morning high as of time of writing
was $29.23 and the low was $28.63. Thursday's reference price was set at
$28.92 in the London a.m., 26 cents per ounce lower than Wednesdays price fix.
Closing out 2011 strong, the headline seasonally adjusted insured unemployment
rate for the week ending Dec. 24 fell 0.1% from the previous week to 2.8%, the
Labor Department reported. Initial claims for unemployment fell to 372,000 last
week, a drop of 15,000 from the revised figure from two weeks ago. The four-week
moving average fell to 373,250, a drop of 3,250 from the previous weeks revised
average of 376,500. Seasonally adjusted non-farm private sector employment rose
325,000 month-over-month in December, according to the latest ADP National
Employment Report, which was released this morning. Novembers estimated increase
was revised down slightly, from 206,000 to 204,000. Gold bullion reached a
two-week high of $1,625 per ounce in London morning trading Thursday before
dropping back to $1,609, according to BullionVault s London Gold Market report.
We believe that gold prices will recover in 2012, and we maintain our bullish
posture, HSBC analyst James Steel said, despite cutting his average 2012
forecast from $2,025 to $1,850 per ounce this week. On the exchanges, gold and
silver trusts were heading lower. The SPDR Gold Trust (NYSE: GLD ) was showing
losses of around 0.2%. The iShares Gold Trust (NYSE: IAU ) was down more than
0.1%. The iShares Silver Trust (NYSE: SLV ) was down around 0.7%. Gold mining
ETFs were falling as well. The Market Vectors Gold Miners ETF (NYSE: GDX ) was
about 0.5% lower. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ ) was
down nearly 2.6%. The Global X Silver Miners ETF (NYSE: SIL ) was around 0.8%
lower. Gold mining shares were broadly lower, Agnico-Eagle Mines (NYSE: AEM )
the exception. Agnico-Eagle Mines was showing gains of some 0.6%. Barrick Gold
(NYSE: ABX ) was down about 0.25%. Eldorado Gold (NYSE: EGO ) was down some
0.5%. Goldcorp (NYSE: GG ) was more than 0.7% lower. Newmont Mining (NYSE: NEM )
was unchanged. NovaGold Resources (AMEX: NG ) was down 1% and more. Silver
mining shares also were heading south. Coeur dAlene Mines (NYSE: CDE ) was
moving lower, down more than 1%. Hecla Mining (NYSE: HL ) was down more than
1.7%. Pan American Silver (NASDAQ: PAAS ) was down some 0.6%. Silver Wheaton
(NYSE: SLW ) was showing losses of around 0.6%. Silver Standard Resources
(NASDAQ: SSRI ) was down nearly 1.2%. As of this writing, Andrew Burger did not
hold a position in any of the aforementioned securities. Adrian Ash of
BullionVault contributed to this report.