Precious Metals Hold Steady as Germany Repatriates Gold

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Gold bullion vault
Gold bullion vault

On Wednesday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, edged 70 cents lower to settle at $1,683.20 per ounce, while silver (NYSEARCA:SLV) futures for March gained a penny to close at $31.54.

Both precious metals were relatively quiet, despite Germany announcing plans to bring back some of its foreign held gold. The Bundesbank confirmed reports and said it will repatriate a portion of its foreign gold reserves. Over the next seven years, the central bank intends to store half of Germany’s gold reserves in its own vaults within the country, compared to only 31 percent now. The other half will remain in New York and London. The actions will remove 300 tonnes of gold from New York.

In a press release, the Bundesbank explains, “With this new storage plan, the Bundesbank is focusing on the two primary functions of the gold reserves: to build trust and confidence domestically, and the ability to exchange gold for foreign currencies at gold trading centres abroad within a short space of time.”

By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) closed 0.06 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) gained 0.30 percent. Gold miners (NYSEARCA:GDX) such as Goldcorp (NYSE:GG) and Newmont Mining (NYSE:NEM) both fell almost 1 percent. Meanwhile, First Majestic Silver (NYSE:AG) and Endeavour Silver (AMEX:EXK) dropped 1.73 percent and 1.21 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS

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