Gold Drops on Improving Economic Data

by Christopher Freeburn | October 31, 2013 4:10 pm

Gold Silver GLD IAU SLV[1]Two positive economic reports bolstered the U.S. dollar against other currencies and sent gold down sharply in Thursday trading.

The Chicago Purchasing Managers’ Index surged to a reading of 65.9 this month, up from 55.7 in September. That surprised analysts, who had expected a modest decline for October. In another report, the Department of Labor announced that 340,000 people filed for first-time unemployment benefits last week, in line with economists’ forecasts.

Investors viewed the good news as evidence that the Federal Reserve might initiate tapering of its monthly bond-buying sooner than previously anticipated.

Gold futures for December delivery dropped 1.9% to $1,323.70 per ounce on Thursday, according to CME Group. Gold traded as high as $1,343 and as low as $1,318.70. Bullion closed in London at $1,325, according to BullionVault.

Silver futures for December plunged 4.9% to $21.87 per ounce. Thursday’s high for silver was $22.69, while the low was $21.73.

Metal funds fell in Thursday trading.

Mining ETFs declined during the day.

Gold stocks retreated on Thursday.

Silver mining shares pulled back hard during the day.

As of this writing, Christopher Freeburn did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault[21] contributed to this report.

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