Both precious metals bounced higher, despite a stronger U.S. dollar on more eurozone fears. The European Central Bank is reviewing its actions on whether or not it treated Spanish government debt too generously in regards to collateral for loans.
Continue Reading Below
Don’t Miss: Will Central Banks Hit Amex Gold Limit?
The WSJ reports, “The issue involves about 80 billion euros in Spanish Treasury bills the ECB accepted as collateral for its loans. The ECB applies different discounts, or haircuts, to collateral based on the quality of the asset being posted. The Treasury bills under question were given the highest collateral rating, but Welt am Sonntag’s research suggests many of the securities should have been given a lower rating, meaning more bills would have needed to be posted to obtain the same amount of ECB credit.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased 0.40 percent, while the iShares Silver Trust (NYSEARCA:SLV) jumped 0.80 percent. Gold miners (NYSEARCA:GDX) such as Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) both fell about 0.40 percent. Silver companies such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) dropped 1.90 percent and 0.80 percent, respectively.
Investor Insight: Is Barrick Gold a Buy After Earnings?
If you would like to receive professional analysis on miners and other precious metal investments, we invite you to try our premium service free for 14 days.
Disclosure: Long EXK, AG, HL, PHYS