Gold, Silver Pause, Other Metals Falter

Published on Monday, 30 January 2012 17:20 Written by Todd Shriber

New York, January 30^th  (TradersHuddle.com) – A stronger U.S. dollar, for one day at least, prompted some profit-taking in the gold pits Monday as gold for February delivery fell slightly by $1.20 to settle at $1,731 a troy ounce in New York, snapping a three-day winning streak in the process. With European policymakers meeting in an effort to prevent the continent’s sovereign debt crisis from escalating, investors were in a pensive mood as both European and U.S. equities traded lower with risk appetite diminishing on the day.

While gold’s Monday declines were moderate, some analysts and traders are now speculating a deeper pullback could be around the corner and the longer Europe provides the market with less-than-cheery headlines, the longer gold and other risk on metals remain vulnerable to a correction.

The yellow metal’s pullback was felt on a deeper level with the miners, which wasn’t all that surprising given how well they’ve been performing this year. The Market Vectors Gold Miners ETF (NYSE: GDX) was off 1.2% while the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) lost 0.8%. That’s a moderate decline under any circumstances, but especially when considering GDXJ was up over 28% in the past month at the start of trading today.

Speaking of moderate declines following substantial runs higher, there is the case of the iShares Silver Trust (NYSE: SLV), which fell 1.3%. Even with that, the ETF is up over 22% year-to-date and is consolidating in a higher range.

Among silver miners, Pan American Silver (NASDAQ: PAAS) fell 1.6% on above average volume despite some late-day chatter about the company possibly being a takeover target. Criticism of the company’s recently announced $1.5 billion acquisition of Minefinders (AMEX: MFN) might have been behind today’s declines. The Global X Silver Miners ETF (NYSE: SIL) endured a small loss, but that ETF has been on fire as of late and is still up more than 16% year-to-date.

The ETFS Physical Platinum Shares (NYSE: PPLT) and the ETFS Physical Palladium Shares (NYSE: PALL) also were both in the red by the time the final bell sounded, underscoring the notion that investors were not in the mood to embrace risk today.

Looking the copper trade, Freeport McMoRan’s (NYSE: FCX) small loss looked good when compared to the Global X Copper ETF (NYSE: COPX) and the iShares MSCI Chile Investable Market Index Fund (NYSE: ECH). Those direct copper plays were down 2.8% and 1.2%, respectively.

Other emerging markets ETFs with ties to the metals were also week on the day as the iShares MSCI All Peru Capped Index Fund (NYSE: EPU) lost two-thirds of a percent on below average turnover while the iShares MSCI South Africa Index Fund (NYSE: EZA) was off 2% also on below average volume.