On Wednesday, gold (NYSEARCA:GLD) futures for August delivery, the most active contract, dropped $45.30 to close at $1,229.80 per ounce, while silver (NYSEARCA:SLV) futures for September plunged 94 cents to finish at $18.61.
Both precious metals posted their lowest settlement since August 2010, despite the Department of Commerce reporting that the economy expanded only 1.8 percent in the first quarter, down from the previous estimate of 2.4 percent. Consumer spending, which accounts for two-thirds of the U.S. economy, experienced the biggest downward revision from 3.4 percent to 2.6 percent.
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On average, economists expected the gross domestic product to maintain its previous estimate of 2.4 percent. Adding to the weakness, real nonresidential fixed investment increased just 0.4 percent in the first quarter, compared to an increase of 13.2 percent in the fourth quarter.
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) closed 4.2 percent in the red, while the iShares Silver Trust (NYSEARCA:SLV) plunged 5.4 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) dropped 8.3 percent and 4.6 percent, respectively. Shares of First Majestic Silver (NYSE:AG) and Hecla Mining (NYSE:HL) both dropped more than 6 percent.
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Disclosure: Long EXK, AG, HL, PHYS