Precious Metals Find Support Amid Lousy Consumer Sentiment, Durable Goods

Wall St. Cheat Sheet

On Friday, gold (NYSEARCA:GLD) futures for December — the most active contract — edged $2.20 higher to close at $1,352.50 per ounce, while silver (NYSEARCA:SLV) futures declined 18 cents to finish at $22.64. Major exchanged-traded funds, like the SPDR Gold Trust and iShares Silver Trust, also finished the day mixed.

Gold and silver both finished off their intra-day lows as economic reports continue to show a fragile economy. According to the Commerce Department, durable goods jumped 3.7 percent in September. However, a large order from Boeing (NYSE:BA) was responsible for the strength. Without the transportation component, orders for long-lasting manufactured goods actually declined 0.1 percent. Meanwhile, new orders of non-military capital goods other than aircraft sank 1.1 percent.

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Making matters worse, the Thomson Reuters/University of Michigan’s final reading on consumer sentiment fell to 73.2 in October, compared to a preliminary reading of 75.2 and September’s final reading of 77.5. It was the worst reading since December 2012. The results were worse than expected. On average, economists expected a final reading of about 75 for October. The consumer sentiment index has missed expectations for two consecutive months, and has declined for three months in a row.

“A misleading headline Durable Goods Orders report for September stoked some initial upside in the US Dollar, but a closer look at the numbers has since dampened optimism over the course of the morning,” explained Christopher Vecchio, currency analyst at DailyFX. “With the final October U. of Michigan Confidence gauge falling back to its lowest level since January, there are already signs that October economic activity declined further. Both prints today add further evidence to the idea that the Federal Reserve will not taper QE3 at its policy meeting next week, and may very well wait until early-2014 to begin so.”

By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) increased 0.40 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell 0.70 percent. Gold miners (NYSEARCA:GDX) Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) gained 0.40 percent and 0.70 percent, respectively. Silver miner (NYSEARCA:SIL) First Majestic Silver (NYSE:AG) managed to jump 1.5 percent, while shares of Endeavour Silver (NYSE:EXK) dipped 0.60 percent.

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Disclosure: Long EXK, AG, HL, PHYS

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