Gold and silver prices rose Friday as investors fled securities vulnerable to a European banking crisis and a stagnant U.S. economy.
Markets from Tokyo to London had suffered steep declines by the time U.S. markets opened, driving investors to safe havens like precious metals and shares of companies that mine such commodities. Worries focused on European banks being dangerously exposed to government debt of such weak economies as Greece, Portugal, Spain and Italy and fresh evidence that the U.S. may slip back into recession.
The upshot was American stock markets opening lower, though within a couple of hours shares of tech companies and Treasuries began rising as investors went bargain hunting. Google Inc., Oracle Corp. Intel Corp., Amazon, Dell Inc. and Cisco Systems Inc. all rose. Clearwire Corp., which provides wireless broadband service, rocketed up 36 percent. The tech-laden Nasdaq composite index climbed into positive territory.
Precious metals opened higher and stayed strong. In early afternoon trading, gold was up about 2 percent to $1,855.10 per ounce. Silver jumped early in the session by nearly 5 percent but later retreated to $42.26, a still robust 3.9 percent gain.
I think it is this wrestling match between the fear and paranoia that drove the market yesterday, and people realizing stocks are really cheap here and bargain hunting, Uri Landesman, president of Platinum Partners, said to the New York Times.
Barrick Gold Corp. rose 1.56 percent, Goldcorp. Inc., gained 1.7 percent, AngloGold Ashanti Ltd. was up 1 percent, Newmont Mining Corp. added 2.1 percent, and Kinross Gold Corp. jumped 1.5 percent.
Silver Wheaton Corp. was up 4.4 percent, Pan American Silver Corp. added 4 percent, Coeur d'Alene Mines Corp. shot up 7.1 percent, Silver Standard Resources Inc. gained 2.6 percent, Silvercorp Metals Inc. was higher by 4.3 percent and Endeavour Silver Corp. picked up 3.8 percent.