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

by Andrew Burger | April 27, 2012 12:15 pm

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[1]. 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[2].

U.S. consumer sentiment rose slightly in April, edging up to 76.4 from 76.2[3] 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[4] 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[5] 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[6] 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[7]) was down around 0.15%.
The iShares Gold Trust (NYSE:IAU[8]) was down around 0.1%.
The iShares Silver Trust (NYSE:SLV[9]) was down around 0.1%.

Gold and silver mining ETFs were negative as well.

The Market Vectors Gold Miners ETF (NYSE:GDX[10]) was showing small losses of around 0.1%.
The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ[11]) was down around 1.55%.
The Global X Silver Miners ETF (NYSE:SIL[12]) was around 0.6% lower.

Gold mining shares were moving higher, with Agnico-Eagle Mines’ 256% quarterly cash dividend increase[13] proving popular with shareholders.

Agnico-Eagle Mines (NYSE:AEM[14]) was surging, up more than 8.6%.
Barrick Gold (NYSE:ABX[15]) was up around 1.25%.
Eldorado Gold (NYSE:EGO[16]) was up around 0.3%.
Goldcorp (NYSE:GG[17]) was up around 0.1%.
Kinross Gold Corp. USA (NYSE:KGC[18]) was nearly 0.8% higher.
Newmont Mining (NYSE:NEM[19]) was up around 1%.
NovaGold Resources (NYSEAMEX:NG[20]) was up some 1.7%.
Yamana Gold (USA) (NYSE:AUY[21]) was up around 1.5%.

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

Coeur d’Alene Mines (NYSE:CDE[22]) was some 0.65% higher.
Hecla Mining (NYSE:HL[23]) was around 0.45% higher.
Pan American Silver (NASDAQ:PAAS[24]) was showing gains of nearly 1%.
Silver Wheaton (NYSE:SLW[25]) was up nearly 1.1%.
Silver Standard Resources (NASDAQ:SSRI[26]) 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.

  1. Kitco market data:
  2. Bloomberg News’ report:
  3. 76.4 from 76.2:
  4. 24.9% in Q1:
  5. downgraded Spain’s credit:
  6. London Gold Market:
  7. GLD:
  8. IAU:
  9. SLV:
  10. GDX:
  11. GDXJ:
  12. SIL:
  13. 256% quarterly cash dividend increase:
  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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