Gold and Silver Stumble as U.S. Dollar Climbs Higher
On Friday, gold (NYSEARCA:GLD) futures for June delivery, the most active contract, dropped $32.00 to close at $1,436.60 per ounce, while silver (NYSEARCA:SLV) futures for July declined 25 cents to finish at $23.66.
Both precious metals closed in the red as the U.S. dollar index, which compares the greenback in a basked against six other flat currencies, climbed to as high as 83.44. After reaching a four-year high on Thursday, the dollar continued to rise against the Japanese yen and hit 102 yen.
Christopher Vecchio, currency analyst at DailyFX, explains, “Clearly, this is a result of ‘Abenomics’ or the Bank of Japan’s ultra-easing policy: with yields nonexistent in Japan, investors are forced to search for yield elsewhere, driving down the value of the Yen while boosting currencies with highly-rated sovereigns like the US Dollar. With the new trend developing, the next leg of Japanese Yen weakness has begun – I expect USDJPY to rally towards 103.00 yen by the end of May.”
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) fell 1.3 percent, while the iShares Silver Trust (NYSEARCA:SLV) traded flat. Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) dropped 1.9 percent and 1.3 percent, respectively. First Majestic Silver (NYSE:AG) declined 1.8 percent, while Endeavour Silver (NYSE:EXK) edged slightly higher.
Don’t Miss: College Debt Bubble Teaches Regret
If you would like to receive professional analysis on miners and other precious metal investments, we invite you to try our premium service free for 14 days.
Disclosure: Long EXK, AG, HL, PHYS