On Wednesday, gold (NYSEARCA:GLD) futures for August delivery, the most active contract, increased $1.30 to close at $1,398.50 per ounce, while silver (NYSEARCA:SLV) futures for July gained 6 cents to finish at $22.47.
Both precious metals received support as the Dow Jones Industrial Average sank more than 200 points on weak economic news. The private sector added only 135,000 jobs last month, according to Automatic Data Processing. That was well below expectations calling for 171,000 jobs.
Furthermore, the U.S. Department of Labor reported that the labor costs declined 4.3 percent during the first quarter, the biggest fall in four years. Hourly compensation plunged 3.8 percent.
With Federal Reserve providing monetary easing for the foreseeable future, demand remains strong for precious metals. The mintage of one ounce of Silver American Eagles surged more than 60 percent in the first five months of the year, compared to the same time period in 2012. Mintage was up 115 percent for the one ounce Gold American Eagle.
Richard Peterson, acting director at the U.S. Mint, tells Reuters, “Demand right now is unprecedented. We are buying all the coin (blanks) they can make,” referring to the Mint’s suppliers.
By the end of the day, shares of the SPDR Gold Trust (NYSEARCA:GLD) increased 0.21 percent, while the iShares Silver Trust (NYSEARCA:SLV) edged 0.05 percent higher. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) gained 0.62 percent and 0.44 percent, respectively. Shares of First Majestic Silver (NYSE:AG) also increased 0.62 percent.
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Disclosure: Long EXK, AG, HL, PHYS