Gold and Silver Finish Flat, Central Bankers Remain Very Accommodating

GOLD

On Thursday, gold (NYSEARCA:GLD) futures for December — the most active contract — edged $1.80 lower to close at $1,311.20 per ounce, while silver (NYSEARCA:SLV) futures for September closed flat at $19.62.

Both precious metals were little changed as the Bank of England and European Central Bank decided to keep record low interest rates in place. Both central banks have their benchmark lending rate at 0.5 percent.

ECB President Mario Draghi said at a recent press conference: “Our monetary policy stance continues to be geared towards maintaining the degree of monetary accommodation warranted by the outlook for price stability and promoting stable money market conditions. It thereby provides support to a gradual recovery in economic activity in the remaining part of the year and in 2014. Looking ahead, our monetary policy stance will remain accommodative for as long as necessary.”

Manufacturing in the United States also expanded, reaching its best level since June 2011. The Institute for Supply Management’s factory index increased to 55.4 in July compared to 50.9 in June. It was the largest one-month gain since 1996. A separate report from the U.S. Department of Labor also showed that initial jobless claims declined by 19,000 to a new five-year low.

By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) declined about 1 percent. Shares of Yamana Gold (NYSE:AUY) plunged 7.9 percent while Newmont Mining (NYSE:NEM) dropped 1.4 percent. Silver miners (NYSEARCA:SILFirst Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) both fell 3.5 percent.

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