Gold and Silver Flat, U.S. Deficit on Track for $1.3 Trillion

  • Like on Facebook
  • Share on Google+
  • Share on LinkedIn

On Wednesday, gold (NYSEARCA:GLD) futures for June delivery edged 40 cents lower to settle at $1,660.30 per ounce, while silver (NYSEARCA:SLV) futures declined 16 cents to close at $31.52.

Both precious metals experienced a dull trading day as the U.S. dollar (NYSE:UUP) edged higher. The Treasury Department reported that the U.S. government ran a budget deficit of almost $200 billion in March, higher than expectations of $196 billion. For the first six months of fiscal 2012, the deficit totaled $779 billion, compared to $829 billion in the first half of 2011.

Don’t Miss: The Federal Reserve Did It Again to Gold Prices

Although the deficit was lower for the first six months, the Treasury still estimates that the deficit for the full year will be $1.3 trillion. It will mark the fourth consecutive year of a deficit above $1 trillion. “The government budget deficit is still bursting at the seams with little chance that either side of the aisle is willing to shake hands and get a deal done. The economy is growing again but we can’t grow our way out of these trillion dollar deficits,” explained Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi, according to Bloomberg.

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined .10 percent, while the iShares Silver Trust (NYSEARCA:SLV) fell .60 percent. Gold miners (NYSEARCA:GDX) such as Goldcorp Inc. (NYSE:GG) and Newmont Mining (NYSE:NEM) dropped 1.8 percent and 2.13 percent. Silver Wheaton (NYSE:SLW) and Silvercorp Metals Inc. (NYSE:SVM) both declined about .90 percent.

Investor Insight: How Serious are China and India About Their Gold?

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

Disclosure: Long EXK, AG, HL, PHYS

More Articles About:

To contact the reporter on this story: staff.writers@wallstcheatsheet.com To contact the editor responsible for this story: editors@wallstcheatsheet.com

Yahoo Finance, Harvard Business Review, Market Watch, The Wall St. Journal, Financial Times, CNN Money, Fox Business