Gold and Silver Close Higher, Is the Worst Finally Over?
On Monday, gold (NYSEARCA:GLD) futures for August delivery, the most active contract, jumped $22.20 to close at $1,234.90 per ounce, while silver (NYSEARCA:SLV) futures for September gained 30 cents to finish at $19.04.
Both precious metals climbed higher as Deutsche Bank issued a note that says most of the correction may be over.
The bank explains, “Lessons from history suggest that although gold-price losses have been extreme, the extent of the price correction today is still some way short of the percentage declines that occurred in 1980-1. However, we would classify events over 30 years as significantly different since at that time, U.S. short-term interest rates rose to 20 percent with real interest rates also rising rapidly…it is possible that the major part of the gold price correction has already occurred.”
By the end of the trading day, shares of the SPDR Gold Trust (NYSEARCA:GLD) and iShares Silver Trust (NYSEARCA:SLV) both increased about 1.2 percent. However, gold miners (NYSEARCA:GDX) such as Newmont Mining (NYSE:NEM) and Yamana Gold (NYSE:AUY) dropped 2.7 percent and 1.6 percent, respectively. Shares of First Majestic Silver (NYSE:AG) declined 2 percent.
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Disclosure: Long EXK, AG, HL, PHYS