Gold, Silver Shares Drop, Precious Metals Surrender Gains

Gold and silver shares turned sharply lower on Tuesday as precious metals relinquished their gains and the broader equity markets headed south.

The Philadelphia Gold & Silver Index (XAU) fell as much as 2.4% to 189.14 this afternoon while the S&P 500 Index slid 0.8%, to 1,341.05.  With today’s sell-off, the XAU – comprised of the world’s largest gold and silver companies – cut its year-to-date gain to 4.7%.

Among gold mining shares, notable decliners included Eldorado Gold (EGO) and IAMGOLD (IAG).  EGO dropped by 3.1% to $12.92 per share and IAG by 2.8% to $16.08 per share.

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First Majestic Silver (AG) and Hecla Mining (HL), two widely-traded silver stocks, retreated 2.1% and 2.4%, respectively.

COMEX gold futures for April delivery – the most actively-traded contract – climbed to an intra-day high of $1,729.9o per ounce this morning after the worse than expected U.S. retail sales report.  However, the yellow metal subsequently turned lower and settled with a loss of $7.20, or 0.4%, at $1,717.70 per ounce.

Silver futures followed a similar trajectory, as the COMEX March contract reached $33.84 earlier but settled lower by 1.1% at $33.35 per ounce.

The move lower in precious metals coincided with U.S. dollar strength, as the greenback advanced 0.6% against a composite of foreign currencies this afternoon.