Tuesday, September 11, 2012

Markets, Metals Soar in Tandem on Fed News

Working together with other central banks, the Federal Reserve gave a big boost to financial and precious markets Wednesday. The Fed and other central banks are cutting the cost for foreign countries to borrow dollars from their own central banks in half, according to news reports. The cheap loans will be available all the way out to February 2013. Word of increased liquidity as a result of the lower costs to borrow dollars reassured market participants, who sent stocks and precious metals surging higher.

Spot gold was up more than 1.75% Wednesday with a bid price of $1,745.40 per ounce and an ask price of $1,746.40 at 10:20 a.m., having traded as high as $1,751.50 and as low as $1,729.60. The London afternoon reference price fixing came in at $1,746, according to Kitco market data.

Spot silver was up nearly 1.7%, bid at $32.46 with an ask price of $32.56. The morning high as of time of writing was $32.70 and the low was $31.85. Monday’s reference price was set at $31.35 in the London a.m.

Gold and silver trusts were showing strong morning gains.

  • The SPDR Gold Trust (NYSE:GLD) was showing gains of around 1.8%.
  • The iShares Gold Trust (NYSE:IAU) also was up nearly 1.8%.
  • The iShares Silver Trust (NYSE:SLV) was moving higher, showing gains of around 2%.

In an abrupt turnaround from recent steep losses, gold and silver mining ETFs were surging higher.

  • The Market Vectors Gold Miners ETF (NYSE:GDX) was up some 4.75%.
  • The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was moving higher, up nearly 6.4%.
  • The Global X Silver Miners ETF (NYSE:SIL) was more than 4.6% higher.

Gold mining shares were climbing steeply, with today’s coordinated central bank action adding more fuel to NovaGold Resources‘ (AMEX:NG) recent surge upwards.

  • Agnico-Eagle Mines (NYSE:AEM) was showing gains of nearly 4.8%.
  • Barrick Gold Corp. (NYSE:ABX) was around 4.3% higher.
  • Goldcorp (NYSE:GG) was showing gains of 6.6% and more.
  • Newmont Mining Corp. (NYSE:NEM) was about 3.25% higher.
  • NovaGold Resources continued racing higher and was up around 8.3%.

Silver mining shares also were moving higher Wednesday.

  • Coeur d’Alene Mines Corp. (NYSE:CDE) was nearly 6% higher.
  • Hecla Mining (NYSE:HL) was up nearly 5.4%.
  • Pan American Silver Corp. (NASDAQ:PAAS) was around 4.7% higher.
  • Silver Wheaton Corp. (NYSE:SLW) was approaching gains of 5%.
  • Silver Standard Resources Inc. (NASDAQ:SSRI) was up more than 2.9%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned stocks.

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