December 09, 2011 at 12:14 PM EST
Gold, Silver March Higher as EU Leaders Agree on New Treaty
Rising euro zone hopes give precious metals a lift

Gold Silver GLD IAU SLVPrecious metals were moving higher along with stocks Friday morning after falling back to a weekly low of $1,705 an ounce in Asian and London trading. European Union leaders all but unanimously agreed to draft a new, stricter EU treaty that calls for greater fiscal integration among member nations. Silver Standard Resources’ shares were surging higher, though no substantive or company-issued news had crossed the wires.

Spot gold was up 0.35%, with a bid price of $1,711.70 and an ask price of 1,712.70 at 10:40 a.m., having traded as high as $1,719.60 and as low as $1,705.80. The London afternoon reference price fix came in at $1,709, $6 an ounce lower than yesterday’s p.m. price fix, according to Kitco market data.

Spot silver was up nearly 0.7%, bid at $31.88 with an ask price of $31.98. The morning high as of time of writing was $32.29, and the low was $31.63. Monday’s reference price was set at $32 in the London a.m.

All 17 euro zone members — those that use the euro as a common currency — agreed to sign a treaty, along with six others who want to join the eurozone, according to a New York Times report. Sweden and the Czech Republic said they needed to discuss the new treaty within their parties and parliaments. Great Britain was the only government of the 27 EU member nations that refused to sign.

“It’s going to be the basis for a good fiscal compact and more discipline in economic policy in the Euro-area members,” European Central Bank (ECB) president Mario Draghi was quoted as saying in a news report following overnight negotiations in Brussels.

All 17 euro zone country leaders agreed to automatic sanctions on any member whose annual budget deficit exceeds 3% of GDP. That’s the same cap that was agreed to in 1997, and that’s been breached by all but two eurozone members — Luxembourg and Finland. Adding more firepower to the euro stabilization effort, another 200 billion euros (~$268 billion) is being added to the European Financial Stability Facility (EFSF), and its implementaion date was moved forward to January 2012.

Turning to stock exchange trading, gold and silver trusts were heading higher.

  • The SPDR Gold Trust (NYSE:GLD) was showing gains of around 0.3%.
  • The iShares Gold Trust (NYSE:IAU) was up around 0.25%.
  • The iShares Silver Trust (NYSE:SLV) was moving higher, up around 1.15%-1.35%.

Gold and silver mining ETFs were retracing the ground they lost yesterday morning.

  • The Market Vectors Gold Miners ETF (NYSE:GDX) was moving higher, up between 0.4% and 0.5%.
  • The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was up some 0.7%.
  • The Global X Silver Miners ETF (NYSE:SIL) was up more than 2.1%.

Gold mining shares were mixed, with Barrick Gold and Goldcorp sliding lower.

  • Agnico-Eagle Mines (NYSE:AEM) was showing gains of some 0.65%.
  • Barrick Gold (NYSE:ABX) was down around 0.35%.
  • Goldcorp (NYSE:GG) was showing losses of around 0.5%.
  • Newmont Mining (NYSE:NEM) was around 0.6% higher.
  • NovaGold Resources (AMEX:NG) was between 0.3% and nearly 0.5% higher.

Silver mining shares were heading higher, with shares of Silver Standard Resources surging upwards.

  • Coeur d’Alene Mines (NYSE:CDE) was moving higher, up nearly 1.6%.
  • Hecla Mining (NYSE:HL) was higher, up some 1.1%.
  • Pan American Silver (NASDAQ:PAAS) was up between 0.8% and 0.9%.
  • Silver Wheaton (NYSE:SLW) was showing gains of between 0.8% and 1%.
  • Silver Standard Resources (NASDAQ:SSRI) was surging higher, up between 5 and 5.8%.

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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