On Friday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, decreased $13.30 to settle at $1,656.60 per ounce, while silver (NYSEARCA:SLV) futures for March dropped 52 cents to close at $31.21. It was gold’s third consecutive decline.
Both precious metals traded in the red, despite the U.S. dollar seeing weakness. The greenback hit an 11-month low against the euro, as European banks will repay more of emergency three-year loans than expected.
The European Central Bank announced that nearly 280 financial institutions will return 137.2 billion euros next week, the first chance for early repayment. The median forecast was only for 84 billion euros.
Christian Schulz, senior economist at Berenberg Bank, told Bloomberg, “The ECB is taking back some of the extra liquidity it injected into the banking system a year ago. This is a stark contrast to other central banks such as the U.S. Federal Reserve, the Bank of England and the Bank of Japan, who are still blowing up their balance sheets. No wonder that the euro exchange rate is going up.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined 0.50 percent, while the iShares Silver Trust (NYSEARCA:SLV) dropped 1.60 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) both fell more than 1 percent. Silver names such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) declined 3.2 percent and 5.2 percent, respectively.
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