Gold, Silver Down on Upbeat Earnings

by Andrew Burger | April 20, 2012 12:48 pm

Gold and silver were lower Friday morning on positive eurozone news, German business confidence and strong earnings reports in the U.S. Spot gold was down 0.12%, bid at $1640.60 as of 11:06 a.m., having traded as high as $1647.60 and as low as $1,637.10 an ounce, according to Kitco market data[1]. The London afternoon reference price was set at $1,641.50, $$8.50 an ounce lower than Thursday’s afternoon reference price.

Spot silver was showing a 0.44% loss, bid at $31.66. The morning high as of time of writing was $32.01 and the low was $31.49. Friday’s reference price was set at $31.79 an ounce in the London a.m., 32 cents an ounce above Thursday’s price fix.

On the earnings front, industrial bellwether General Electric (NYSE:GE) reported[2] slightly better-than-expected Q1 revenue and profit, with analysts noting organic growth in its energy business as a positive sign. First-quarter earnings at Fortune 500 peer McDonald’s (NYSE:MCD) rose 4.8%[3] on strong revenue and improved profitability.

Gathering in Washington, D.C., for this weekend’s IMF/World Bank/G20 meeting[4], emerging market BRIC country leaders (Brazil, Russia, India, China) are ready to contribute at least an additional $100 billion to meet the IMF’s goal of doubling its capital base. The IMF already has commitments of $320 billion in hand.

Ifo Institute’s index of business and investor confidence[5] beat expectations in April, keeping a string of better-than-expected readings alive by rising for a sixth consecutive month, to 109.9 from 109.8 in March. Germany’s economic think tanks — Munich-based Ifo Institute included — yesterday raised their prediction for 2012 German economic growth 1/10 of a percentage point, to 0.9%, and to 2% for 2013.

China economists are on central bank watch, anticipating that the People’s Bank of China will make a third reduction in reserve requirements[6].

Gold bullion prices dropped as low as $1,640 an ounce in relatively flat trading Friday morning in London, BullionVault reported in its London Gold Market report[7].

“Overall, the price action since the February high of $1,790 has been quite weak,” BullionVault quoted the latest technical analysis from Gold Bullion dealing bank Scotia Mocatta. “We would expect liquidation selling of gold below $1,600. We do not see fresh buying emerge until we can reclaim the $1,700 level.”

Gold and silver trusts were flat to lower in U.S. stock exchange trading Friday morning.

The SPDR Gold Trust (NYSE:GLD[8]) was up and down around flatline.
The iShares Gold Trust (NYSE:IAU[9]) was flat as well.
The iShares Silver Trust (NYSE:SLV[10]) was down more than 0.1%.

Gold and silver mining ETFs were mixed, with the major gold miners ETF lower, the junior gold miners ETF higher and the silver miners ETF flat.

The Market Vectors Gold Miners ETF (NYSE:GDX[11]) was showing losses of around 0.5%.
The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ[12]) was up around 1%.
The Global X Silver Miners ETF (NYSE:SIL[13]) was moving around the unchanged level.

Gold mining shares were turning in a mixed performance, with Barrick Gold leading the way higher.

Agnico-Eagle Mines (NYSE:AEM[14]) was showing losses of more than 0.7%.
Barrick Gold (NYSE:ABX[15]) was down around 1.3%.
Eldorado Gold (NYSE:EGO[16]) was around 0.4% lower.
Goldcorp (NYSE:GG[17]) was showing gains of some 0.3%.
Kinross Gold Corp. USA (NYSE:KGC[18]) was around 0.6% lower.
Newmont Mining (NYSE:NEM[19]) was moving around the unchanged level.
NovaGold Resources (NYSEAMEX:NG[20]) was up more than 1%.
Yamana Gold (USA) (NYSE:AUY[21]) was up some 0.4%.

Silver mining shares also were mixed.

Coeur d’Alene Mines (NYSE:CDE[22]) was showing losses of 0.7%.
Hecla Mining (NYSE:HL[23]) was up nearly 1%.
Pan American Silver (NASDAQ:PAAS[24]) was showing gains of around 0.6%.
Silver Wheaton (NYSE:SLW[25]) was down less than 0.1%.
Silver Standard Resources (NASDAQ:SSRI[26]) was down less than 0.1%.

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.

  1. Kitco market data:
  2. General Electric (NYSE:GE) reported:
  3. McDonald’s (NYSE:MCD) rose 4.8%:
  4. IMF/World Bank/G20 meeting:
  5. index of business and investor confidence:
  6. make a third reduction in reserve requirements:
  7. London Gold Market report:
  8. GLD:
  9. IAU:
  10. SLV:
  11. GDX:
  12. GDXJ:
  13. SIL:
  14. AEM:
  15. ABX:
  16. EGO:
  17. GG:
  18. KGC:
  19. NEM:
  20. NG:
  21. AUY:
  22. CDE:
  23. HL:
  24. PAAS:
  25. SLW:
  26. SSRI:

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