January in the Books: Silver (SLV) Outperforms Gold (GLD)

On Tuesday, gold (NYSEARCA:GLD) futures for February delivery climbed $6.80 higher to settle at $1,737.80 per ounce, while silver (NYSEARCA:SLV) futures fell 27 cents to close at $33.26.  Gold prices gained 11 percent for January, but failed to keep up with silver’s 19 percent gain.

“Silver got hammered following last April’s peak,” says Dan Smith, head of metals research at Standard Chartered.  “Now we’re into a phase where it will do quite well, appeal comes from its widespread use in both industry and investment. I think it’s relatively cheap.”

Don’t Miss: With Friends Like These Does Gold Need an Official QE3?

The U.S. dollar (NYSE:UUP) gained strength as consumer confidence declined in January.  In a release issued Tuesday by The Conference Board, the Consumer Confidence Index CCI fell slightly in January to 61.1 (1985=100), from 64.8 in December. Consensus forecasts had been a for rise to 68.

The decrease came after increases in November and December. The current downturn came in part from fewer consumers describing business conditions as ‘good’ (16.3 percent to 13.3 percent), and more saying conditions are ‘bad’ (38.7 percent from 33.5 percent). Expectations of income increases were also down, 13.8 percent from 16.3.

Investor Insight: Is 2012 the Year of the Golden Dragon?

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) edged .41 percent higher, while the iShares Silver Trust (NYSEARCA:SLV) declined .80 percent.  Gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Yamana Gold (NYSE:AUY) declined, while Newmont Mining (NYSE:NEM) increased .30 percent.  Silver miners (NYSEARCA:SIL) such as First Majestic (NYSE:AG) gained more than 2 percent, while Endeavour Silver (NYSE:EXK) jumped 3.4 percent.

If you would like to receive more professional analysis on equity miners and other precious metal investments, we invite you to try our premium service free for 14 days.

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