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Gold and Silver Prices Rise on EU Promises

February 13, 2010 – Gold and silver prices rose this week on the strength of promises by the European Union to help resolve fiscal problems among its member countries. The news of assistance for Greece helped to encourage investors, reducing risk aversion and allowing the two metals to break a three-week losing streak. Friday afternoon’s prices saw silver rise 1.1% to $15.33 per ounce, while gold registered a strong 2.3% increase to reach $1,082.00 per ounce.

European Union President Herman Van Rompuy stated this week that the EU pledged to “take determined and coordinated action if needed to safeguard the euro area as a whole.” This simple pledge built up investor confidence, raising the euro early in the week and pushing gold and silver investors to take new positions, leading to a positive week.

The next upward movement in precious metals prices related to the “PIGS” situation likely won’t occur until specific steps for the recovery are announced. Reports state that details are still being negotiated, with loans and budget tightening measures being discussed. Greek labor unions protested this week against cost cutting measures which would likely include pay cuts among their rank and file.

While both gold and silver are positioned to rise based on their fundamentals, the announcement of specific steps by the EU will likely push prices even higher against the US dollar. Investors who are considering additional holdings in either metal should look to purchase in advance of further news out of Europe.

Shannon King

Senior Staff Writer – GoldSilver.org

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