Taper-Talk Takes the "Precious" Out of Gold and Silver

Michael Teague |

Precious metals stocks were trading on heavy losses Monday after the Institute for Supply Management released much better than expected manufacturing data for the month of November.

Manufacturing Data Renews Fears of Taper

ISM data showed manufacturing in the US at a 2.5-year high for the month of November, which along with positive numbers out of the Eurozone and China, re-ignited investor anxiety over the possibility that a tapering of Federal Reserve stimulus-spending would be in the offing sooner than later.

Prices for and stocks tied to metals like Silver and Gold throughout 2013 have reacted in a conflicted manner to the near-constant threat of tapering. Heading to the closing bell on Monday, investors didn’t even need one hand to count the gold stocks that had made gains, with futures prices for delivery this month were down almost 2.5 percent to $1,220.50. Meanwhile, all silver stocks were down, with the nearest contracts off almost 4 percent to $19.20.

Gold and Silver Stocks Limping Along

The largest gold companies were hit the hardest, with Barrick Gold (ABX) and Yamana Gold (AUY) off over 5 percent, Newmont Mining (NEM) off over 3 percent, and Eldorado Gold Corp. (EGO) off 7.5 percent. Silver miners fared even worse, with all stocks off over 4 percent, and the biggest losses taken by Canada’s First Majestic (AG) and Endeavour Silver (EXK) .

A number of commodities began heading for bear-market territory this year, but the bifurcation between equities and precious metals has been the most dramatic. Gold and to a lesser extent silver have traditionally been seen as “safe-haven” investments for times of uncertainty, but with the continued support of the Federal Reserve’s unprecedented monetary stimulus, this status has become muddled to the point that outbreaks of “taper-talk” can actually lead to significant outflows from precious metals.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
ABX Barrick Gold Corporation 16.82 -0.22 -1.29 4,895,279
AG First Majestic Silver Corp. (Canada) 8.22 -0.14 -1.68 1,839,148
AUY Yamana Gold Inc. (Canada) 3.84 -0.06 -1.41 10,859,874
CHHQF China Hongqiao Group Ltd n/a n/a n/a 0
EGO Eldorado Gold Corporation 3.70 -0.07 -1.73 1,791,619
EXK Endeavour Silver Corporation (Canada) 4.56 -0.04 -0.87 574,910
NEM Newmont Mining Corporation 36.26 -0.76 -2.04 2,336,816


Emerging Growth

Beleave Inc.

Beleave Inc is a biotech company. The Company is engaged in the production of medical marijuana under the Marihuana for Medical Purposes Regulations outlined by Health Canada.

Private Markets


Autonomous security robots providing advanced detection capabilities at $7 per hour - aiming to define the future of security. Help #StopTheViolence.

Cross Campus

With over 500 members and operating 80,000 square feet by summer 2016, Cross Campus is one of the country’s top ten shared, collaborative office or "coworking" operators in the US.…