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Gold, Silver Up on Positive But Slow U.S. GDP

Worsening economic conditions in Spain and U.S. 1Q earnings reports contributed as well


Gold and silver were moving higher, looking to manage a weekly gain, Friday morning amid a positive yet weaker-than-expected U.S. GDP report, worsening economic conditions in Spain and incoming 1Q U.S. earnings reports.

Spot gold was up 0.53%, bid at $1,665.90 as of 10:54 a.m., having traded as high as $1,669 and as low as $1,654.30 an ounce, according to Kitco market data. The London afternoon reference price was set at $1,663.50, $10 an ounce higher than Thursday’s afternoon reference price.

Spot silver was showing a 0.71% gain, bid at $31.31. The morning high as of time of writing was $31.55 and the low was $31.03. Friday’s reference price was set at $31.14 an ounce in the London a.m., 44 cents an ounce above Thursday’s price fix.

U.S. 1Q GDP rose a real 2.2%, lower than economists’ consensus forecasts, the Commerce Dept. reported, as a smaller-than-anticipated buildup in business inventory overshadowed a healthy pickup in consumer spending. Q1 GDP growth follows a 3% 4Q 2011 gain. Household purchases increased 2.9%, the highest in a year, while home building grew at its fastest rate in nearly two years, according to Bloomberg News’ report.

U.S. consumer sentiment rose slightly in April, edging up to 76.4 from 76.2 in March, according to the Thomson Reuters/University of Michigan consumer-sentiment index. April’s reading was better than
economists’ consensus forecast of 75.7.

Spain’s unemployment rate jumped to 24.9% in Q1 from Q4 20111’s 22.9%, the highest rate in the 17-nation eurozone and Spain’s highest since 1994. Standard & Poor’s downgraded Spain’s credit rating one notch, from A to BBB+. Young adults are particularly hard hit, with unemployment among those under 25 running at 52%, up from 48.5% in Q4. Spanish unemployment grew by 729,400 year-over-year in 1Q. There are now 1.7 million Spanish households in which no one working.

Gold bullion prices continued to hover around the $1,650-an ounce level in London morning trading Friday, well within a range stretching back to mid-March, according to BullionVault’s London Gold Market report.

Gold’s trading range corresponds with similar conditions in the dollar/euro foreign exchange market.
“The euro/dollar has held above $1.30 for some time, in the $1.30-$1.32 range, which coincides with gold also being caught in a range,” BullionVault quoted Robin Bhar, head of metals research at Société Générale. “If the eurozone crisis deepens and we see the euro/dollar correct below $1.30, that could give a bit of a lift to gold.”

In U.S. stock exchange trading, gold and silver trusts were showing smallish losses.

The SPDR Gold Trust (NYSE:GLD) was down around 0.15%.
The iShares Gold Trust (NYSE:IAU) was down around 0.1%.
The iShares Silver Trust (NYSE:SLV) was down around 0.1%.

Gold and silver mining ETFs were negative as well.

The Market Vectors Gold Miners ETF (NYSE:GDX) was showing small losses of around 0.1%.
The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was down around 1.55%.
The Global X Silver Miners ETF (NYSE:SIL) was around 0.6% lower.

Gold mining shares were moving higher, with Agnico-Eagle Mines’ 256% quarterly cash dividend increase proving popular with shareholders.

Agnico-Eagle Mines (NYSE:AEM) was surging, up more than 8.6%.
Barrick Gold (NYSE:ABX) was up around 1.25%.
Eldorado Gold (NYSE:EGO) was up around 0.3%.
Goldcorp (NYSE:GG) was up around 0.1%.
Kinross Gold Corp. USA (NYSE:KGC) was nearly 0.8% higher.
Newmont Mining (NYSE:NEM) was up around 1%.
NovaGold Resources (NYSEAMEX:NG) was up some 1.7%.
Yamana Gold (USA) (NYSE:AUY) was up around 1.5%.

Silver mining shares were showing gains to close out the week’s trading.

Coeur d’Alene Mines (NYSE:CDE) was some 0.65% higher.
Hecla Mining (NYSE:HL) was around 0.45% higher.
Pan American Silver (NASDAQ:PAAS) was showing gains of nearly 1%.
Silver Wheaton (NYSE:SLW) was up nearly 1.1%.
Silver Standard Resources (NASDAQ:SSRI) was up some 0.5%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.

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