This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold, Silver Explode on Huge Reversal (Update 2)

Updated from 12:45 p.m. ET with settlement prices

NEW YORK ( TheStreet) -- Gold prices on Monday afternoon reversed morning losses as technical trading gained upside momentum.

Gold for June delivery at the COMEX division of the CME jumped $19.40 to settle at $1,384.10 an ounce. The gold price traded as high as $1,397.90 and as low as $1,336.30 an ounce, while the spot price was adding $34.50, according to Kitco's gold index.

Silver prices dropped early Monday morning to the lowest level since 2010, but a steady rise off those lows past key buying levels, combined with short-sellers having to cover their short positions, boosted silver and gold.

"As the market started to come up, it was hitting short-seller stops and then that old huge level of support for silver , that low traders would put all their buy stops there. Once prices hit that, that's when it did that parabolic move up," said Phil Streible, senior commodities broker at RJO Futures. "All those shorts that got in this morning, they're all covering, and all the longs that got blown out get back in on the long side."

Silver prices for July delivery gained 23 cents to $22.58 an ounce, retracing from a three-year low of $20.25 an ounce. The U.S. dollar index was sinking 0.49% to $83.80.

Traders were saying Monday morning ahead of the sudden gap higher that the morning lows in gold and silver were a result of downward momentum that had carried over from Friday, and belief that the Federal Reserve was signaling a retreat from inflationary policies.

"I don't know any particular news other than people continue to be concerned about exiting -- the Fed stimulus exit -- with the economic news improving, consumer confidence was better," said Adrian Day, president of Adrian Day Asset Management.

"We saw the market really gap open, it was a continuation of Friday's selloff," Streible said in an interview. "We saw an accelerated downturn, just silver hitting a lot of sell stops, and the stops have been very thin as the lower levels go."

Gold mining stocks closed mostly higher on Monday. Eldorado Gold (EGO) surged 10%, while Kinross Gold (NG) popped 7.8%.

Among volume leaders, Barrick Gold (ABX - Get Report) increased 7.3%

Gold ETF SPDR Gold Trust (GLD) climbed 3.1% to $135.12 a share, while iShares Gold Trust (IAU) added 3% to $13.57.

-- Written by Joe Deaux in New York.

>Contact by Email.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG
ABX $12.76 0.00%
AU $11.41 0.00%
GLD $115.60 0.00%
IAU $11.64 0.00%
NG $3.67 0.00%

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs