On Friday, gold (NYSEARCA:GLD) futures for December — the most active contract — declined $10.50 to close at $1,313.20 per ounce, while silver (NYSEARCA:SLV) futures edged 3 cents lower to finish at $21.84. Major exchange traded funds, like the SPDR Gold Trust and iShares Silver Trust, also closed in negative territory.
Gold and silver stumbled this week as economic reports were mostly positive. Manufacturing conditions in the U.S. continued to improve in October despite the 16-day partial government shutdown.
According to the Institute for Supply Management, which released the October reading of its Manufacturing Report on Business on Friday morning, business activity within the manufacturing sector actually accelerated for the month. Its headline purchasing managers’ index increased from 56.2 to 56.4, the fifth consecutive month of growth. New orders increased fractionally to 60.6, although the index for production fell from 62.6 to 60.8. The index for employment showed decelerated growth at 53.2, but growth nonetheless.
The shutdown seems to have had an inconsistent affect on the overall industry. Executives from textile mills report that “new business is booming,” while fabricated metal products report that the “government shutting down and threatening to go into a default position is causing all kinds of concerns in our markets.” Transportation equipment manufacturers report that “government spending continues to be slow in defense and military,” but that “the government shutdown and debt ceiling crisis did not affect business.”
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) declined 0.60 percent, while the iShares Silver Trust (NYSEARCA:SLV) edged 0.10 percent lower. Gold miners (NYSEARCA:GDX) Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) plunged 7.1 percent and 6 percent, respectively. Silver miners (NYSEARCA:SIL) Endeavour Silver (NYSE:EXK) and First Majestic Silver (NYSE:AG) dropped 4.3 percent and 3.5 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS