Stimulus Hopes Don’t Help Gold

GLDAhead of the conclusion of the Federal Open Market Committee meeting on Wednesday, gold didn’t get any support Tuesday. COMEX gold for August delivery fell $3.80, or 0.2%, to settle at $1,623.20 per troy ounce. Traders are now back to the business of hoping and praying that Federal Reserve Chairman Ben Bernanke will give some overt signal that more monetary easing is on the way.


In one indication that traders are expecting a heaping dose of quantitative easing, the U.S. dollar was whacked today as the PowerShares DB US Dollar Index Bullish (NYSE: UUP) fell 0.75% on volume that was well above the daily average. Fed easing was one culprit for the dollar’s demise, a move that should have boosted gold but did not.


Another move that should have helped gold but did not was a successful Spanish bond auction. Spain, the Euro Zone’s fourth-largest economy was able to auction $3.8 billion in 12-month bills, topping the original target of $3 billion, suppressing alarmingly high yields on Spanish 10-years in the process.  That’s certainly not an invitation to load up on European sovereigns, but any good news regarding Spanish bonds is welcomed at this point.


The iShares Gold Trust (NYSE: IAU) and the SPDR Gold Shares (NYSE: GLD), the two largest ETFs backed by physical holdings of gold, each lost more than 0.4% on the day and both funds are found nestling near some important technical areas. The iShares Silver Trust (NYSE: SLV) gave up almost 1% on light volume. Suddenly that ETF appears destined to find its way back to support at $26. That assumes more easing doesn’t come to pass.


Even on a day when stocks soared, proof risk on was sort of working, the other white metals did nothing to impress. The ETFS Physical Platinum Shares (NYSE: PPLT) and the ETFS Physical Palladium Shares (NYSE: PALL) each lost about a third of a percent on anemic turnover.


There was some interesting action among the mining ETFs today. For example, the Global X Silver Miners ETF (NYSE: SIL) notched a small gain and came to a dead stop right at resistance at $20. The Market Vectors Gold Miners ETF (NYSE: GDX) took a small loss, falling just shy of resistance at $47.80. The Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) added 3 cents, but closed well off its highs of the day. In GDXJ’s defense, the ETF did close above $21, potentially bullish sign.

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