Gold Falls on ISM Report, Fed Comments

by Christopher Freeburn | August 5, 2013 4:40 pm

Gold Silver GLD IAU SLV[1]Gold slid in Monday trading after a strong business activity report and comments from a Federal Reserve bank president signaling that the Fed could start tapering its monthly bond-buying sooner than expected.

The Institute for Supply Management’s service sector index jumped from a reading of 52.2 in June to 56 last month. That surprised economists who were looking for a smaller rise to a reading of 53.1.

During remarks delivered before state retirement administrators in Oregon, Dallas Federal Reserve Bank President Richard Fisher said last month’s drop in the nation’s unemployment rate to 7.4% moves the Fed “closer to execution mode, pondering the right time to begin reducing its purchases, assuming there is no intervening reversal in economic momentum in coming months.”

Gold futures for December delivery fell 0.6% to $1,302.40 per ounce Monday, according to CME Group[2]. Gold traded as high as $1,320.30 and as low as $1,296.70. Gold bullion closed in London at $1,304, according to BullionVault[3].

Silver futures for December delivery dipped 1% $19.76 per ounce. Monday’s high for silver was $20.03, while the low was $19.57.

Gold and silver funds fell in Monday trading.

Gold and silver mining ETFs were mixed during the day.

Gold mining shares mostly slid in Monday trading.

Silver mining shares also were on the decline.

As of this writing, Christopher Freeburn did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault[23] contributed to this report.

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