On Wednesday, gold (NYSEARCA:GLD) futures for April delivery, the most active contract, fell $4.50 to settle at $1,645.10 per ounce, while silver (NYSEARCA:SLV) futures for March dropped 15 cents to close at $30.87.
Both precious metals remain stuck in consolidation mode, despite an outlook from the United Kingdom saying inflation will remain above the 2 percent target rate for the next two years. Bank of England Governor Mervyn King also warned that tightening monetary policy was not the answer for economic woes.
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He explains, “We do need to get back to normal interest rates, but if we were to try to get back today or this year, we would simply turn the economy into a deeper recession. And trying to reconcile those two positions is the challenge of the paradox of policy and it’s proving exceptionally difficult and I don’t have an easy answer to it.”
By the end of the trading day, the SPDR Gold Trust (NYSEARCA:GLD) closed 0.53 percent lower, while the iShares Silver Trust (NYSEARCA:SLV) dropped 1.06 percent. Barrick Gold (NYSE:ABX) closed nearly 3 percent in the red, while Freeport-McMoRan Copper & Gold (NYSE:FCX) finished the day flat. Silver names such as Hecla Mining (NYSE:HL) and Endeavour Silver (NYSE:EXK) both fell more than 1 percent.
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Disclosure: Long EXK, AG, HL, PHYS