On Tuesday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, increased $7.90 to settle at $1,660.80 per ounce, while silver (NYSEARCA:SLV) futures for March gained 40 cents to close at $31.18.
Both precious metals snapped their losing streak as the U.S. dollar and consumer confidence declined. With the Federal Reserve set to keep its current monetary policy in place at the conclusion of its two-day Federal Open Market Committee meeting tomorrow, the dollar index reached as low as 79.54.
Meanwhile, the consumer confidence index in January dropped to 58.6, compared to 66.7 in the previous month. It was the lowest reading since November 2011 and the worst month-over-month decline since August 2011.
Lynn Franco, Director of Economic Indicators at The Conference Board, explains, “Consumer Confidence posted another sharp decline in January, erasing all of the gains made through 2012. Consumers are more pessimistic about the economic outlook and, in particular, their financial situation. The increase in the payroll tax has undoubtedly dampened consumers’ spirits and it may take a while for confidence to rebound and consumers to recover from their initial paycheck shock.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased 0.40 percent, while the iShares Silver Trust (NYSEARCA:SLV) jumped 1.45 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Goldcorp (NYSE:GG) both gained nearly 2 percent. Silver names such as Endeavour Silver (NYSE:EXK) and First Majestic Silver (NYSE:AG) surged 3.5 percent and 4.10 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS