Gold and Silver Trade Lower, BOJ Launches QE10

On Thursday, gold (NYSEARCA:GLD) futures for February delivery, the most active contract, dropped $21.80 to settle at $1,645.90 per ounce, while silver (NYSEARCA:SLV) futures for March plunged $1.44 to close at $29.68.

Both precious metals witnessed heavy selling pressure, despite a weaker U.S. dollar index and the Bank of Japan announcing another quantitative easing program.

At its two-day policy board meeting, the Bank of Japan decided to increase its asset purchase program for the third time in only four months. The central bank effectively launched QE10 by expanding the monetary easing weapon by 10 trillion yen to 101 trillion yen. Including the latest move, the BOJ has expanded its quantitative easing program five times this year.

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However, nations are still adding to gold reserves. Brazil, which added to its gold reserves for the first time since 2008 in September, has already doubled its reserves to over 2 million troy ounces, according to Bloomberg.

By the end of the day, the SPDR Gold Trust (NYSEARCA:GLD) closed 1.21 percent in the red, while the iShares Silver Trust (NYSEARCA:SLV) fell 3.69 percent. Gold miners (NYSEARCA:GDX) such as Goldcorp (NYSE:GG) and Yamana Gold (NYSE:AUY) dropped 1.60 percent and 1.89 percent, respectively. Silver names such as Silver Wheaton (NYSE:SLW) and Endeavour Silver (NYSE:EXK) declined 1.08 percent and 1.51 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS