On Tuesday, gold (NYSEARCA:GLD) futures for August delivery, the most active contract, declined $9.00 to close at $1,377 per ounce, while silver (NYSEARCA:SLV) futures for July fell 28 cents to finish at $21.65.
Both precious metals traded lower as the Bank of Japan kept its current monetary policy unchanged, and upgraded its view of the economy. The central bank voted to keep expanding its money base at an annual rate of 60 trillion to 70 trillion yen.
Yoshiki Shinke, chief economist at Daiichi Life Research Institute, tells Bloomberg, “Apparently the BOJ considers a stock plunge is temporary, but the central bank would be forced to act if stock prices keep heading south,” At the same time, “if a central bank does everything investors call for, it would be pushed into a corner and forced to react endlessly.”
By the end of the trading day, the SPDR Gold Trust (NYSEARCA:GLD) declined 0.52 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell more than 1 percent. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) both plunged more than 3 percent. Shares of First Majestic Silver (NYSE:AG) dropped 2.14 percent.
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Disclosure: Long EXK, AG, HL, PHYS