Gold and Silver Break Losing Streak, Barrick Attracts Attention

Wall St. Cheat Sheet

On Wednesday, gold (NYSEARCA:GLD) futures for December delivery increased $4.20 to settle at $1,606.60 per ounce, while silver (NYSEARCA:SLV) futures edged 5 cents higher to close at $27.81.

Both precious metals logged their first gain of the week, despite consumer prices in the United States being reported as flat in July. The Labor Department said that prices for consumer items last month were unchanged and increased only 1.4 percent from a year earlier. It was the smallest annual gain since November 2010.

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However, the tempered inflation data provides more cushion for the central bank to ease. The WSJ reports, “Modest overall inflation gives the Federal Reserve room to prop up the sagging recovery, if necessary. While job creation perked up somewhat in July, many are calling on the central bank to offer additional stimulus to bring down the unemployment rate and boost overall economic growth.”

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By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) closed 0.32 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) edged 0.04 percent higher. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) gained 1.61 percent and 0.63 percent, respectively.  Meanwhile, First Majestic (NYSE:AG) and Endeavour Silver (NYSE:EXK) jumped 2.1 percent and 1.41 percent, respectively.

Greenlight Capital’s David Einhorn increased his position in Barrick Gold by 94 percent to almost 2 million shares worth $73.9 million, as of the end of June, according to the recently filed 13-F with the Securities and Exchange Commission. Steve Cohen’s SAC Capital Advisors LP also raised its stake in the world’s largest gold miner to 507,030 shares, compared to 119,206 shares in the first quarter.

Investor Insight: Do Hedge Funds Still Have Faith in GOLD?

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Disclosure: Long EXK, AG, HL, PHYS