Gold and silver exchange traded funds have been rising this week with Europe’s debt debacle in the spotlight. Greek legislators were expected to vote in favor of austerity measures on Wednesday morning.
Precious metals ETFs traded higher in Wednesday’s premarket, while CurrencyShares Euro Trust (NYSEArca: FXE) rose 0.5% as the euro strengthened against the dollar. Gold futures were trading over $1,500 an ounce.
“[Greek] Prime Minister Papandreou’s margin for error is small and shall be growing smaller, for we cannot imagine that all of his majority will stand with him on this vote given the anger and antipathy that the Greek public has toward this austerity program,” Barron’s reports.
Yet a favor in vote of austerity in Greece should enable more financial aid from Europe and ease the debt pressure. Gold ETFs have moved below their 50-day moving average. That could be taken as a key sign that momentum is breaking, Barron’s argues. [Dollar Rally Tarnishes Gold, Silver ETFs.]
“There are still a lot of reasons to own gold, but on a day like this when there is some brightened sentiment, it’s hard to be bullish,” said Adam Klopfenstein, a market strategist with brokerage Lind-Waldock, on Tuesday.
Wednesday’s vote by Greek lawmakers concerning budget cuts and a five year austerity plan will likely set sentiment for the metals going forward.