Gold (GLD) and Silver (SLV) Decline After Unemployment Report
The U.S. dollar (NYSE:UUP) climbed higher early Friday as positive economic data was released. The Institute for Supply Management’s services index rose in January to its highest level in nearly a year as new orders and employment jumped. The ISM services index, which measures the pace of growth in the U.S. services sector, rose to 56.8 in January from a revised 53.0 in December. It was the highest level since February 2011. The new orders index increased from 54.6 to 59.4 in the month, though gauge of prices paid also rose, from 62.0 to 63.5.
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The U.S. jobless rate dropped unexpectedly in January to 8.3 percent, the lowest level since February 2009. According to the Labor Department, the economy added 243,000 jobs. With the unemployment rate falling, doubt has been raised on how much additional easing the Fed will provide. As a result, many gold and silver investments declined.
In the afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined 1.9 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined 2.3 percent. Gold miners (NYSEARCA:GDX) such as Newmont Mining Corp. (NYSE:NEM) and Barrick Gold (NYSE:ABX) dropped 2 percent and 2.5 percent, respectively. Silver miners (NYSEARCA:SIL) such as Endeavour Silver (NYSE:EXK) and First Majestic (NYSE:AG) also declined 2.7 percent and 1.5 percent, respectively.
Despite more legal problems, Hecla Mining (NYSE:HL) edged almost 1 percent higher. Marketwire reports, “The law firm of Izard Nobel LLP, which has significant experience representing investors in prosecuting claims of securities fraud, announces that a lawsuit seeking class action status has been filed in the United States District Court for the District of Idaho on behalf of purchasers of the common stock of Hecla Mining Company between October 26, 2010 and January 11, 2012.”
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