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Gold and Silver Fell on July 22

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Gold and silver weakened on July 22

Gold and silver started June 22 on a weaker note and continued to decline as the day progress. At 2:30 PM EDT on July 22, the COMEX copper futures contract for September delivery was trading at $1,323.65 per ounce, a drop of ~0.54%. Silver was trading at ~$19.68 per ounce, a decline of ~0.67%.

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Stronger dollar weighs on gold

The dollar gained strength on Friday, July 22 amid better-than-expected US economic data that strengthened the US dollar. The stronger US dollar weighs on prices of dollar-denominated commodities like gold.

According to the preliminary data released by the Markit at 9:45 AM EDT on Friday, July 22, the manufacturing PMI for July rose to 52.9, which is better than the Market’s expectation of 51.6 and June’s reading of 51.3. This better-than-expected preliminary manufacturing PMI took the shine out of the safe haven assets and weighed on gold prices.

This better-than-expected US economic data also increased the chances of an  interest rate hike by Federal Reserve by the end of 2016 and dented the sentiment in the gold market.

On the other hand, the European Central Bank (or ECB) left the interest rates unchanged. The ECB president, Mario Draghi, said that the ECB is ready for further easing if necessary. These dovish comments intensified the market’s hopes of stimulus from central banks amid concerns triggered by the Brexit vote.

At 2:50 PM EDT on July 22, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), and Royal Gold (RGLD) gained ~1%, ~2.0% ,and ~0.77%, respectively. Silver Wheaton (SLW) declined by ~0.11%. The  SPDR Gold Trust ETF (GLD) fell by ~0.73%.

The final article in this series explains the performance of companies in the metals and mining sector on Friday, July 22.

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