International Business Times
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By Eric McWhinnie | March 7, 2012 12:19 PM PST

Wall St. Cheat Sheet

On Wednesday, gold (NYSEARCA:GLD) futures for April delivery increased $11.80 to settle at $1,681.50 per ounce, while silver (NYSEARCA:SLV) futures gained 80 cents to close at $33.56.  Greek concerns have eased since yesterday, but a possible new bond buying program from the Federal Reserve ignited precious metals.

Investors holding 58 percent of all Greek bonds eligible for the nation’s debt swap have so far agreed to participate. Greece’s largest banks, most of the country’s pension funds, and more than 30 European banks and insurers have indicated they’ll take part, all but guaranteeing the country will successfully pull off the biggest sovereign restructuring in history.  The goal of the exchange is to reduce the 206 billion euros of privately held Greek debt by 53.5 percent. The total held by investors that have said they will participate is at least 120 billion euros. The Greek government has already said it will use collective action clauses to force bondholders into the swap if it gets sufficient approval from investors participating voluntarily. The government has said it wants participation above 90 percent and is seeking a minimum level of 75 percent.

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With the Fed set to meet next week, the WSJ reports, “Federal Reserve officials are considering a new type of bond-buying program designed to subdue worries about future inflation if they decide to take new steps to boost the economy in the months ahead.  Under the new approach, the Fed would print new money to buy long-term mortgage or Treasury bonds but effectively tie up that money by borrowing it back for short periods at low rates.”  Just the mention of another bond buying program was enough to give gold and silver names a pop.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased .54 percent, while the iShares Silver Trust (NYSEARCA:SLV) gained 1.3 percent.  However, gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Goldcorp Inc. (NYSE:GG) edged .17 percent and .64 percent lower, respectively.  Silver miners (NYSEARCA:SIL) such as Endeavour Silver (NYSE:EXK) and Silvercorp Metals (NYSE:SVM) both gained more than 2 percent.

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To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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The article was first published by Wall St. Cheat Sheet and does not represent the views or opinions of International Business Times.

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