In a choppy, volatile session, gold was able to extend its winning streak to five days, but only by the skin of its teeth. COMEX gold for August delivery added just 20 cents to settle at $1,619.60 an ounce on weak volume. Gold’s gains were tepid to say the least considering the dollar was lower, the risk on attitude traders had for most of the day and rampant speculation that global central banks may unleash more monetary easing sooner than later.
Traders also failed to earnestly bid gold higher despite some a mixed bag of U.S. economic data. In economic news, initial claims for jobless benefits increased by 6,000 to 386,000 last week. Analysts expected a reading of 375,000 new claims. The less volatile four-week moving average rose by 3,500 to 382,000 claims. The Labor Department said the consumer price index fell by 0.3% last month after being unchanged in April. Economists expected a decline of 0.2%.
Ahead of Greek elections Sunday, Italy and Spain, the Euro Zone’s third- and fourth-largest economies, respectively, pledged new action to deal with their fiscal woes. Those headlines should have been another catalyst to boost gold’s fortunes, but that was not the case.
Speculation was rampant on Thursday that global central banks, including the Federal Reserve and European Central Bank, will act swiftly to assuage global financial markets should the results of the Greek elections prove to be the final nail in the country’s Euro Zone coffin. If Greece cannot form a coalition and remain part of the Euro Zone, the reaction by global markets would be predictably dire and it appears central banks stand ready to act.
Just the thought of more quantitative easing was enough to lift the iShares Gold Trust (NYSE: IAU) and the SPDR Gold Shares (NYSE: GLD) to gains of 0.4% today, though volume was light across both funds. Silver didn’t follow suit as the iShares Silver Trust (NYSE: SLV) gave up two-thirds of a percent.
The real surprises were the platinum metals, which in theory, should have been doomed by the slack U.S. economic data. The ETFS Physical Palladium Shares (NYSE: PALL) surged 2.4% on its best volume in several days while the ETFS Physical Platinum Shares (NYSE: PPLT) gained 2.2%. PPLT now faces overhead resistance in the form of its 50-day moving average.
The miners were truly mixed on the day. The Global X Silver Miners ETF (NYSE: SIL) finished flat while the Market Vectors Gold Miners ETF (NYSE: GDX) notched a small gain. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) was the laggard of the group with a loss that was small by that volatile fund’s standards.