Exchange traded funds tracking gold and silver jumped Tuesday on lingering Eurozone concerns while Moody’s warned on Chinese banks’ exposure to local debt.
“Gold prices eased last week amidst retreating risk aversion as crucial Greek deficit reduction measures were passed and an IMF/EU funding was secured,” ETF Securities said in its weekly precious metals update. “Bargain hunting emerged under $1,500 an ounce, however, making the break below short-lived.”
Gold and silver ETFs strengthened Tuesday with some investors betting the Greek austerity vote will buy only a little time before Europe’s debt crisis reemerges. Also Tuesday, Moody’s downgraded Portugal’s debt rating to “junk” status.
“Continued uncertainty about the implementation of Greece’s promised austerity measures in the face of slowing growth and rising social unrest appears to be keeping underlying demand for gold strong despite the passage of new funding to get the country through its July and August debt payments,” ETF Securities said Tuesday.
ETFS Physical Swiss Gold Shares (NYSEArca: SGOL)