Greece Means Good For Gold

Published on Tuesday, 07 February 2012 18:16 Written by Todd Shriber

New York, February 7^th (TradersHuddle.com) – When the news is good, or at least less bad out of Europe, it usually translates into some bullish performances for precious metals and that scenario was at work today as speculation that Greece is inching closer to a deal to avoid a sovereign debt default sent gold prices surging. More constructive comments from Federal Reserve Chairman Ben Bernanke also helped Comex-traded gold for April delivery jump $23.50, or 1.4%, to close at $1,748.40 a troy ounce. All that despite comments from HSBC, which said Chinese demand for the yellow metal hasn’t been too impressive as of late.

The iShares Gold Trust (NYSE: IAU) added 1.5% on the day, but silver’s gains were even more impressive as the iShares Silver Trust (NYSE: SLV) was up nearly 1.8% on above average volume. SLV has seen inflows of $169.4 million over the past week, according to ETF Channel, indicating investors are bidding up the ETF on expectations of higher silver prices to come.

Other precious metals got in on the act as well today with the ETFS Physical Palladium Shares (NYSE: PALL) notching a small gain. PALL continues to consolidate around $70, but needs to string together some closes above that important technical level to induce new buying. The ETFS Physical Platinum Shares (NYSE: PPLT) added $2.45, or 1.5%, to close at $163.05, just below the intraday high. PPLT needs add another 1.5% to break through key resistance.

It was another glum day for copper as the iPath DJ-UBS Copper TR Sub-Index ETN (NYSE: JJC) lost  five cents. The Global X Copper Miners ETF (NYSE: COPX) was considerably weaker, tumbling 2% on weak volume.

Speaking of mining ETFs, the Market Vectors Gold Miners ETF (NYSE: GDX) was off half a percent while its small-cap equivalent, the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) was flat on the day. The Global X Silver Miners ETF (NYSE: SIL) added half a percent on extremely light turnover.

For those looking for a mining ETF that hasn’t been getting much press, consider the Global X Gold Explorers ETF (NYSE: GLDX). This under-the-radar play is up over 14% year-to-date and focuses on more obscure names than what are found in the Market Vectors Gold Miners ETF.

The Global X Gold Explorers ETF is hovering around $12.30 with what appears to be firm support at $10. Upside resistance is $14, which is where the 200-day line can be found. If GLDX can get through there on strong volume, the ETF would be off to the races and could make a legitimate back to the $19 area. Remember, just because no one is talking GLDX doesn’t mean it can’t generate impressive returns.