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Gold and Silver Prices Slip as Investors Remain Cautious Ahead of European Summit

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Gold and silver prices slipped in early trading today as investors remain cautious ahead of the all important European Union summit on December 9. Investors are hoping that European policymakers will come up with a concrete plan at the summit to contain the debt crisis in the euro zone.

The debt crisis in the euro zone, which has now lasted for more than two years, is now threatening the existence of the single currency. This has pushed policymakers to act more aggressively to stem the debt crisis.


Leaders of France and Germany, two of the euro zone’s biggest economy, are meeting in Paris today to outline plans to move into a fiscal union. If the euro zone nations move into a fiscal union, the European Central Bank (ECB) may make a stronger intervention in the bond markets to bring down borrowing costs. Last week, Mario Draghi, ECB’s President, said that the bank will do more if politicians come up with a concrete plan to move closer to a fiscal union.

Over the weekend, Italy’s new prime minister, Mario Monti announced 30 billion euros worth of budget cuts. Italian bond yields fell today.

Spot gold prices are currently down 0.9% to $1,729.99 an ounce. Last week, spot gold prices rose almost 4%. Gold futures for delivery in December, meanwhile, are currently down 0.75% to $1,738.20 an ounce.

Commerzbank analyst Eugen Weinberg told CNBC today that should sentiment improve further in the market it would not be surprising if gold falls again but it may also come under pressure if the rest of commodity sector comes under pressure. Weinberg also said that gold is not performing as expected at the moment but there is no reason to be worried yet.

Silver prices are also lower today. At last check, spot silver was down 0.12% to $32.52 an ounce.

The iShares Silver Trust (ETF) (NYSE: SLV) is up 0.57% to $31.82 in pre-market trading today, while the ProShares Ultra Silver (ETF) (NYSE: AGQ) is up 0.42% to $59.52 in pre-market trading today.

The ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently down 0.57% to $12.25 in pre-market trading.

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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