Gold and Silver Hold Steady After Upbeat Economic Reports

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On Tuesday, gold (NYSEARCA:GLD) futures for August delivery, the most active contract, dipped $2.00 to close at $1,275.10 per ounce, while silver (NYSEARCA:SLV) futures for September edged 3 cents higher to finish at $19.55.

Both precious metals were relatively unchanged, despite several better-than-expected economic reports. Orders for goods in the United States meant to last at least three years increased 3.6 percent in May, representing the third consecutive monthly gain. Economists only expected a rise of about 3.0 percent.

Furthermore, the index of consumer attitudes jumped to 81.4 in June, compared to 74.3 in May, according to The Conference Board. It was the best level for consumer confidence since January 2008. Analysts polled by Reuters expected the index to only reach 75.4 this month.

Lynn Franco, Director of Economic Indicators at The Conference Board, explains, “Consumer confidence increased for the third consecutive month and is now at its highest level since January 2008 (Index 87.3). Consumers are considerably more positive about current business and labor market conditions than they were at the beginning of the year. Expectations have also improved considerably over the past several months, suggesting that the pace of growth is unlikely to slow in the short-term, and may even moderately pick up.”

Improved economic reports have led to speculation that the Federal Reserve could start to dial down its bond-buying programs later this year. Fed Chairman Ben Bernanke even claimed last week that the central bank could end its quantitative easing programs completely by mid-2014 if the economy meets the Fed’s forecast.

In afternoon trading, shares of the SPDR Gold Trust (NYSEARCA:GLD) dipped 0.50 percent, while the iShares Silver Trust (NYSEARCA:SLV) edged 0.20 percent lower. However, Yamana Gold (NYSE:AUY) managed to climb 0.20 percent higher. Silver miners (NYSEARCA:SIL) such as First Majestic Silver (NYSE:AG) and Endeavour Silver (NYSE:EXK) gained 2.3 percent and 1.3 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS

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