Gold and Silver Decline on Stronger U.S. Dollar

On Thursday, gold (NYSEARCA:GLD) futures for August delivery fell $12.40 to settle at $1,609.40 per ounce, while silver (NYSEARCA:SLV) futures dropped 61 cents to close at $27.65.

Both precious metals declined as the U.S. dollar index jumped to as high as 82.95. The greenback received a boost from the falling euro. The European Central Bank announced a 25 basis point reduction in the region’s main refinancing rate, while also decreasing the deposit rate to zero percent. China also cut interest rates for the second time this year and the Bank of England launched a third round of QE, buying 50 billion pounds of asset purchases.

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ECB President Mario Draghi said, “The risks surrounding the economic outlook for the euro area continue to be on the downside. They relate, in particular, to a renewed increase in the tensions in several euro area financial markets and their potential spillover to the euro area real economy. Downside risks also relate to possibly renewed increases in energy prices over the medium term.”

By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) declined 1.13 percent, while the iShares Silver Trust (NYSEARCA:SLV) closed more than 2 percent lower. Gold miners (NYSEARCA:GDX) such as Newmont Mining Corp. (NYSE:NEM) and Yamana Gold, Inc. (NYSE:AUY) fell 1.39 percent and 1.48 percent, respectively. Silver Wheaton Corp. (NYSE:SLW) edged 0.56 percent lower, while Endeavour Silver Corp. (NYSE:EXK) declined 1.16 percent.

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Disclosure: Long EXK, AG, HL, PHYS