Gold and Silver Calm Down After Selloff

On Thursday, gold (NYSEARCA:GLD) futures for December delivery decreased $9.70 to settle at $1,574.60 per ounce, while silver (NYSEARCA:SLV) futures edged 34 cents higher to settle at $29.23.

U.S. wholesale prices rose less than forecast in November as falling energy prices kept inflation in check.  In the 12 months ending in November, wholesale prices increased 5.7 percent, down from a 5.9 percent year-over-year pace in October and the smallest yearly increase since March.  The Labor Department’s core measure, which excludes food and fuel, rose 0.1 percent last month, while the producer price index, which measures price changes before they reach consumers, climbed 0.3 percent, paced by a 1 percent advance in food prices.

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The increase in food costs last month was led by a 12 percent jump in vegetable prices and an 8 percent gain in chickens.  Slowing growth in Europe and Asia may restrain the cost of raw materials, while high unemployment and stagnant wages may hold down demand in the U.S., giving companies little room to raise prices.

After Wednesday’s sharp decline in precious metals, gold and silver were relatively calm.  The SPDR Gold Trust (NYSEARCA:GLD) declined .33 percent, while the iShares Silver Trust (NYSEARCA:SLV) gained .50 percent in afternoon trading.  Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both edged .85 percent lower.  Silver miners (NYSEARCA:SIL) such as Endeavour Silver (NYSE:EXK) decreased .10 percent, while First Majestic (NYSE:AG) jumped 9 percent.

Despite ending a labour dispute, shares of Freeport-McMoRan Copper & Gold (NYSE:FCX) declined more than 1 percent.  The company operates one of the world’s largest gold and copper mines in Papua, but has incurred losses as high as $18 million per day due to a strike that started September 15.

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