SLV - Precious metals miners give up recent gains as banking fears ease

2023-03-21 18:15:11 ET

Gold prices tumbled Tuesday, wiping out two days' worth of gains that briefly lifted prices past $2,000/oz for the first time in a year.

Profit-taking is part of the reason, along with uncertainty over the Federal Reserve's decision on interest rates tomorrow and what Fed Chair Jerome Powell will say about the banking sector in the wake of the collapse of Silicon Valley Bank.

According to the CME FedWatch tool, markets are pricing in an 82% likelihood the Fed will impose a 25 basis point rate hike and an 18% chance it will stand pat.

Front-month Comex gold for March delivery ( XAUUSD:CUR ) finished -2.1% to $1,938.00/oz, and front-month March silver ( XAGUSD:CUR ) settled -0.9% to $22.324/oz.

ETFs: ( NYSEARCA: GLD ), ( NYSEARCA: GDX ), ( GDXJ ), ( IAU ), ( NUGT ), ( PHYS ), ( SLV ), ( PSLV ), ( SIVR ), ( SIL ), ( SILJ ), ( SLVP )

Mining stocks gave up some of their recent gains too, including Newmont ( NEM ) -2.5% , Barrick Gold ( GOLD ) -3% , Kinross Gold ( KGC ) -2.9% , Agnico Eagle Mines ( AEM ) -2.7% , Yamana Gold ( AUY ) -3.2% , Eldorado Gold ( EGO ) -5.3% , Iamgold ( IAG ) -4.7% , Endeavour Silver ( EXK ) -5.4% , Fortuna Silver Mines ( FSM ) -6.7% , Pan American Silver ( PAAS ) -4.4% .

First Majestic Silver ( NYSE: AG ) closed -22.6% after saying it is suspending all mining activities and reducing its workforce at the Jerritt Canyon mine in Nevada.

While fears about the banking system have eased a bit, some analysts believe it is only a matter of time before gold retakes the $2,000/oz mark.

"With heightened uncertainty following the demise of Silicon Valley Bank and travails of Credit Suisse, global financial markets have been placed on the back-foot , leading many to increase their exposure to gold," according to The Royal Mint analyst Stuart O'Reilly.

Comex gold closed last week at its highest since April 2022, jumping 5.8% for the week in its best one-week percentage gain in nearly three years .

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