On Thursday, gold (NYSEARCA:GLD) futures for June delivery jumped $38.30 to settle at $1,574.90 per ounce, bouncing off 10-month lows made yesterday. Meanwhile, silver (NYSEARCA:SLV) futures increased 82 cents to close at $28.02.
Both precious metals climbed higher as the U.S. dollar traded lower for the first time in two weeks. Furthermore, a manufacturers report released by the Federal Reserve Bank of Philadelphia showed that general business activity within the factory sector declined to -5.8 in May, compared to 8.5 in April. It was the first negative reading for the index in eight months.
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Economists were expecting the index to come in between 9.3 and 10.0. “This indicates that the U.S. economic growth is a lot more tentative. The market wasn’t prepared for this; it was expecting risks from Europe while we recovered,” said Subodh Kumar, chief investment strategist for Subodh Kumar & Associates. “Markets will continue to correct.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) gained 2.22 percent, while the iShares Silver Trust (NYSEARCA:SLV) bounced more than 3 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Barrick Gold (NYSE:ABX) surged 5.05 percent and 6.41 percent, respectively. Silver names such as First Majestic (NYSE:AG) and Silver Wheaton (NYSE:SLW) jumped 4.60 percent and 5.32 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS