Gold Logs Best Quarter Since 2010, Silver Outperforms Everything in Q3

Wall St. Cheat Sheet

On Friday, gold (NYSEARCA:GLD) futures for December delivery decreased $6.60 to settle at $1,773.90 per ounce, while silver (NYSEARCA:SLV) edged 9 cents lower to close at $34.58. Both precious metals logged their best quarterly performance since 2010.

Although gold and silver dipped on the final trading day in the third quarter, new economic reports will likely support reasoning for additional monetary easing. Business activity in the U.S. contracted this month for the first time since September 2009. The Institute for Supply Management Chicago fell to a seasonally adjusted 49.7, compared to 53 in August. Meanwhile, consumer sentiment in the U.S. as measured by the Thomson Reuters/University of Michigan’s index came in at 78.3, below estimates of 79.

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The effects of loose monetary policies were also evident in the latest consumer spending figures from the Commerce Department. Consumer spending rose 0.5 percent in August, the largest increase in six months. However, once inflation is factored in, spending only edged 0.1 percent higher. Higher living costs also prompted many Americans to cut back on savings. The U.S. savings rate declined to 3.7 percent, compared to 4.1 percent in July.

As the chart below shows, investors and those worried about fiat currencies resorted to precious metals in the third quarter. Silver outperformed all asset classes, with platinum, gold and palladium all making large moves as well.

By the end of Friday, the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) both edged about 0.30 percent lower. Gold miners (NYSEARCA:GDX) such as Newmont Mining (NYSE:NEM) and Goldcorp (NYSE:GG) declined 0.93 percent and 1.21 percent, respectively. First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) fell 1.11 percent and 1.77 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS