Gold Settles $10 Lower to Extend Losing Streak: GLD, SLV

On Tuesday, gold (NYSEARCA:GLD) futures for December delivery decreased $10.50 to settle at $1,594.20 per ounce, while silver (NYSEARCA:SLV) futures edged 35 cents lower to settle at $28.70.  It was the fourth consecutive day that gold settled lower.

Consumer confidence rose in December to the highest level in eight months as the job market continued to show signs of improvement.  The Conference Board’s index increased to 64.5 this month, its highest reading since April. Today’s report also revised November’s reading to 55.2. The measure of consumer confidence in the U.S. averaged 53.7 during the recession that ended in June 2009.

Investor Insights: China Cracks Down on Gold Exchanges.

“A large part of the problem in the economy is one of confidence, and to the extent that sentiment begins improving it would be a positive for growth,” said Dana Saporta, director of U.S. economic research at Credit Suisse in New York. However, whether higher consumer confidence is sustained “depends on the employment situation going forward.”

Gold and silver investments declined across the board.  In afternoon trading, the SPDR Gold Shares Trust (NYSEARCA:GLD) declined .94 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell by 1.4 percent.  Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) both declined more than 1 percent.  Meanwhile, silver miners (NYSEARCA:SIL) such as Endeavour Silver (AMEX:EXK), First Majestic (NYSE:AG) and Silver Wheaton Corp. (NYSE:SLW) fell more than 2 percent.

Due to record breaking gold prices this year, more unauthorized gold exchanges have been created to capitalize on gold fever.  However, China regulators are not happy about the competition.  A joint statement issued by People’s Bank of China, the Ministry of Public Security and other regulators recently announced, “No local authority, institution or individual is allowed to set up gold exchanges.”  In essence, gold exchanges in China, except for two in Shanghai are to be banned.  The joint statement also explained that the Shanghai Gold Exchange and the Shanghai Futures Exchange are sufficient enough to meet domestic investor demand for spot gold and futures trading.

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To contact the reporter on this story: Eric McWhinnie at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com