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Shrinking Trade Deficit Sends Gold Down

Gold fell back below $1,300 an ounce while miners tumbled


Gold Silver GLD IAU SLVA report that the U.S. trade deficit in June fell to its lowest level in more than three years ignited speculation that the U.S. economy outpaced growth estimates during the second quarter, dampening gold’s appeal as a safe haven. The metal slid in Tuesday trading.

According to data released by the Commerce Department, the trade deficit dropped 22.4% to $34.2 billion in June. That marked its lowest level since October 2009. It also surprised economists who had forecast the trade deficit to decline more modestly to $43.5 billion in June. The lower-than-expected trade deficit suggested a stronger U.S. economy, raising the chances that the Federal Reserve will taper its monthly bond-buying before the end of this year.

Gold futures for December delivery sank 1.5% to $1,282.50 per ounce Tuesday, according to CME Group. Gold traded as high as $1,306.40 and as low as $1,278.10. Gold bullion closed in London at $1,285, according to BullionVault.
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Silver futures for December delivery slid 1% $19.57 per ounce. Tuesday’s high for silver was $19.82, while the low was $19.51.

Gold and silver funds declined in Tuesday trading.

  • The SPDR Gold Trust (GLD) fell 1.4%.
  • The iShares Gold Trust (IAU) also dropped 1.4%.
  • The iShares Silver Trust (SLV) slipped 1%.

Gold and silver mining ETFs moved sharply lower during the day.

  • The Market Vectors Gold Miners ETF (GDX) tumbled 5.3%.
  • The Market Vectors Junior Gold Miners ETF (GDXJ) sank 5.2%.
  • The Global X Silver Miners ETF (SIL) plunged 7%.

Gold mining shares retreated on Tuesday.

  • Agnico-Eagle Mines (AEM) dropped 3.9%.
  • Barrick Gold (ABX) slumped 4.5%.
  • Eldorado Gold (EGO) fell 5%.
  • Goldcorp (GG) waned 5.2%.
  • Kinross Gold (KGC) slipped 2.8%.
  • Newmont Mining (NEM) tumbled 6.5%.
  • NovaGold Resources (NG) plunged 8.4%.
  • Yamana Gold (AUY) lost 7.2%.

Silver mining shares also pulled back during the day.

  • Coeur d’Alene Mines (CDE) fell 5.9%.
  • Hecla Mining (HL) dropped 6.4%.
  • Pan American Silver (PAAS) slid 4.1%.
  • Silver Wheaton (SLW) declined 4.6%.
  • Silver Standard Resources (SSRI) tumbled 7.1%.

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

Article printed from InvestorPlace Media, http://investorplace.com/2013/08/shrinking-trade-deficit-sends-gold-down/.

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