Both precious metals climbed higher as a new report shows that central banks are still adding gold to holdings. Bloomberg reports, “Brazil raised its gold reserves for a second month in October to the highest level in more than 11 years as emerging nations from Kazakhstan to Russia boosted holdings by more than 40 metric tons. Brazil’s holdings expanded 17.2 tons last month to 52.5 tons, the most since January 2001, according to data on the International Monetary Fund’s website. The country’s 1.7-ton purchase in September was the first since December 2008.” Nations have purchased 374 tons of gold in the first nine months of the year, and the World Gold Council estimates that number will total 450 to 500 tons by the end of the year.
Don’t Miss: Gold Bulls Refuse to Back Down
“This is a chunky purchase by a central bank, and the gold market will likely sit up and pay attention,” Edel Tully, an analyst at UBS AG in London, wrote today in a report referring to Brazil’s addition, according to Bloomberg. “Today’s news confirms much of the market chatter at the time that official sector buying was taking place and was one of the key factors that gave prices a reasonable floor last month.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) edged 0.10 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) gained 0.60 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) increased about 0.90 percent and 0.65 percent, respectively. Silver names such as Silvercorp Metals (NYSE:SVM) and First Majestic Silver (NYSE:AG) jumped 1.45 percent and 2.70 percent, respectively.
Investor Insight: Are Hedge Funds Still Interested in Gold?
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
Copyright Wall St Cheat Street All rights reserved.