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 won’t 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. Monday’s reference price was set at $30.90 in the London a.m., $1.25 an ounce lower than last Friday’s reference price.
Gold and silver trusts were losing value early Monday.
Gold and silver mining ETFs also were down sharply.
Shares of gold miners were heading south as well.
Silver miners’ shares also were falling, with Hecla Mining showing steep losses.
As of this writing, Andrew Burger did not hold a position in any of the aforementioned stocks.