Gold and Silver Rebound From Multi-Week Lows

On Thursday, gold (NYSEARCA:GLD) futures for April delivery increased $16.60 to settle at $1,659.50 per ounce, while silver (NYSEARCA:SLV) futures jumped 55 cents to close at $32.73.  The “gold market is finding support from both physical purchasing and interest at the ETF level,” explained Jeff Wright, a precious-metals analyst with Global Hunter Securities.

The U.S. dollar (NYSE:UUP) declined as the International Monetary Fund approved its share of an international rescue package for Athens, also being funded by the European Union and the European Financial Stability Facility.  Over the next four years, the IMF will give Greece 28 billion euros.  “As agreed, new official financing of 130 billion euro will be committed by the euro area and the IMF for the period 2012-2014,” Jean-Claude Juncker, chairman of the group of euro zone finance ministers, said on Wednesday of the total package.

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Greece has been unable to raise money on the international bond markets high because of high borrowing rates. Athens had completed a swap of privately-held bonds to cut its debts by more than 100 billion euros and taken other economic measures to help earn the EU-IMF deal. Greece’s debt is now expected to fall below a target of 120 percent of GDP to 117 percent by 2020.

Massive debt levels in several countries around the world still gives investors plenty of reasons to invest in gold and silver.  In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased 1 percent, while the iShares Silver Trust (NYSEARCA:SLV) gained .80 percent.  Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Barrick Gold (NYSE:ABX) jumped more than 1.5 percent.  Silver miners (NYSEARCA:SIL) such as Silvercorp Metals Inc. (NYSE:SVM) and First Majestic Silver (NYSE:AG) both increased nearly 1 percent.

Freeport-McMoRan Copper & Gold Inc. (NYSE:FCX) shares edged .50 percent higher.  The miner announced that the strike in Indonesia has ended.  First quarter copper sales volume is estimated to be reduced by 80 million pounds, gold production will be reduced by 125,000 ounces out of a targeted 425,000 ounces.

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To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com