Gold and Silver Finish Lower Amid Dollar Strength

   on February 22 2013 4:44 PM
An employee picks up a gold bar at the Austrian Gold and Silver Separating Plant 'Oegussa' in Vienna
The Martabe gold and silver mine should have started operations in 2011 but the heavy rains in the Sumatra region hampered it from doing so. Its original owner, OZ Minerals spent about $285 million constructing the mine that started in June 2008. However, in May 2009, Hong Kong-based G-resources Group acquired 95 per cent stake ownership in the Martabe gold and silver mine project, for $220 million, from Oz Minerals. REUTERS

On Friday, gold (NYSEARCA:GLD) futures for April delivery, the most active contract, decreased $5.80 to settle at $1,572.80 per ounce, while silver (NYSEARCA:SLV) futures for March fell 24 cents to close at $28.46.

Both precious metals finished the week lower, as the U.S. dollar gained strength against the euro currency. The euro-zone economy is expected to contract for the second consecutive year in 2013, and the third year in the past five, according to the European Commission. The forecast is for a 0.3 percent contraction and expects a decrease in spending by businesses, consumers and national governments.

“This has grave social consequences and will, if unemployment becomes structurally entrenched, also weigh on growth perspectives going forward,” said Marco Buti, the commission’s top civil servant, in a statement.

Furthermore, the European Central Bank said 356 banks in the region would repay 61.1 billion euros of the cheap emergency loans taken out a year ago, less than the 122.5 billion euros expected.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) dipped 0.15 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined 0.20 percent. However, gold miners (NYSEARCA:GDX) such as Newmont Mining (NYSE:NEM) and Barrick Gold (NYSE:ABX) managed to climb higher. Silver names such as First Majestic Silver (NYSE:AG) and Hecla Mining (NYSE:HL) both dropped more than 1 percent.

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