Gold and silver shares endured further weakness on Wednesday as escalating euro zone sovereign debt concerns ignited broad-based selling in financial markets.
The Philadelphia Gold & Silver Index (XAU) – comprised of the world’s largest precious metals companies – dropped 2.0% to 191.37 in early afternoon trading. Notable decliners included XAU components Freeport-McMoRan Copper & Gold (FCX), Harmony Gold (HMY), and Silver Standard Resources (SSRI). FCX retreated by 2.4% to $34.77 per share, HMY by 3.6% to $12.55 per share, and SSRI by 3.3% to $13.35 per share.
COMEX gold futures fell to as low as $1,680.10 per ounce this morning, but pared their losses to trade near $1,695.00 per ounce as of 12:35pm ET. Silver futures were down 3.5% at $31.88 per ounce at this time.
The euro currency came under considerable pressure against the U.S. dollar on Wednesday, as it slid 1.2% to 1.3345.
The broader U.S. equity markets slid as well, with the Dow Jones Industrial Average (DJIA) plunging 200.03 points, or 1.7%, to 11,293.69 – its lowest level since October 10th. Risk aversion climbed concurrently, evidenced by a 3.9% rise to 33.21 in the CBOE Volatility Index (VIX).
The markets’ losses were tied in part to a disappointing German 10-year bond auction, as well as a report from Fitch Ratings that France’s AAA credit rating could be at risk of a downgrade if the crisis continues to instensify.
Fortuna Silver Reports “Best Quarter Yet”
The Company noted that it expects to report sustained low cost quarterly silver production growth over the upcoming 18 months as it expands its San Jose mine in Mexico from 1,000 tonnes per day (tpd) to the design capacity of 1,500tpd. Fortuna also reported that it continues to seek organic growth opportunities beyond existing reserves and resources; to that end, the Company presently has eight drill rigs turning on its 70,000 hectare properties in Peru and Mexico. Full Fortuna Silver Press Release
- Operating income of $14.89 million, compared to $1.03 million in Q3 2010
- Cash position (including short term investments) and working capital as at September 30, 2011 were $62.73 million and $70.22 million respectively
- Silver production of 660,749 ounces up from 474,489 ounces in 2010; silver accounted for 70% of revenue
- Cash cost per silver ounce, net of by product credits, of $1.45
