Gold and Silver Decline, Dollar Gains Against Euro

On Tuesday, gold (NYSEARCA:GLD) futures for August delivery declined $9.30 to settle at $1,579.80 per ounce, while silver (NYSEARCA:SLV) futures dropped 56 cents to close at $26.88.

Both precious metals declined as the U.S. dollar index climbed to as high as 83.49. Meanwhile, the euro currency hit fresh two-year lows at $1.2236. The Bank of Japan also said on Tuesday that it was implementing “strong monetary easing steps, such as its near-zero interest rate policy and asset purchases in order to overcome deflation.” Speculation builds that the central bank may offer more easing.

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The latest machinery orders report in Japan declined at a record pace in May, fueling concerns of a global slowdown. Reuters reports, “Core machinery orders, which help to gauge the strength of capital spending, fell 14.8 percent in May, data showed on Monday, much worse than a median forecast for a 3.3 percent drop and the biggest decline since comparable data became available in April 2005.”

In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) declined 1.4 percent, while the iShares Silver Trust (NYSEARCA:SLV) slipped 2.03 percent. Gold miners (NYSEARCA:GDX) such as Yamana Gold (NYSE:AUY) and Barrick Gold (NYSE:ABX) both fell more than 2 percent. Silver names such as Coeur d’Alene Mines Corp. (NYSE:CDE) and Silver Wheaton (NYSE:SLW) dropped 5.08 percent and  4.65 percent, respectively.

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Disclosure: Long EXK, AG, HL, PHYS