On Thursday, gold (NYSEARCA:GLD) futures for August delivery, the most active contract, dropped $18.20 to close at $1,211.60 per ounce, while silver (NYSEARCA:SLV) futures for September edged 6 cents lower to finish at $18.55. Gold has declined every day this week, and broke below $1,200 per ounce for the first time since August 2010.
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Both precious metals experienced weakness as the U.S. dollar held steady amid positive economic reports. Jobless claims declined by 9,000 to 346,000 in the week ended June 22, compared to 355,000 in the prior week. Meanwhile, consumer spending increased 0.3 percent in May, rebounding from its 0.3 percent decline in April — the biggest drop since September 2009.
David Song, currency analyst at DailyFX, explains in an email statement, “The U.S. dollar extended the advance from earlier this week, with gold breaking below the $1200 handle amid the slew of positive developments coming out of the world’s largest economy. Indeed, it seems as though a growing number of Fed officials are becoming increasingly upbeat towards the economy as the region gets on a more sustainable path, and the bullish sentiment surrounding the reserve currency should gather pace in the second-half of the year amid the growing discussion at the Federal Reserve to taper the asset-purchase program.”
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) sank 2 percent, while the iShares Silver Trust (NYSEARCA:SLV) traded flat. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Newmont Mining (NYSE:NEM) jumped 2.3 percent and 1.8 percent, respectively. Shares of First Majestic Silver (NYSE:AG) surged more than 7 percent.
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Disclosure: Long EXK, AG, HL, PHYS