Commodities Continue to Limp on Wednesday as Dow Suffers Triple Digit Loss

Andrew Klips |

gold prices, gold mining stocks, investing in goldGold futures dove for the second straight day on Wednesday, with June contracts suffering another 1.4 percent loss to close at $1,553.50 per ounce on the Comex division of the NY Mercantile Exchange, following about at 1.6 percent decline on Tuesday as investors continue to steer clear of the precious yellow metal. Risk appetite for equities has been high with the Dow and S&P 500 posting record levels recently, keeping traders away from precious metals, despite financial concerns in Europe that offer bolsters appetite for bullion as a safe haven asset. Even a slipping US dollar on Tuesday didn’t bring investors to gold.

It was the lowest settlement for the most actively traded future contract for gold since June 2012.

Gold and the US dollar general move in opposite directions as gold is priced in US dollars, so a stronger greenback makes gold more expensive for investors using foreign currencies. The ICE Dollar Index, which measures the US dollar against a basket of other currencies, has been on a steady climb since February, rising more than 5 percent in two months.

Spot gold has lost more than 6 percent in the same timeframe. Since the start of 2013, gold has declined 7.3 percent.

Silver for May delivery unloaded 1.7 percent on Tuesday to wrap the day at $26.797 per ounce in New York, the lowest level since late in July 2012. Like gold, silver doesn’t have much appeal as a safe haven precious metal and investors are questioning global industrial demand for the whitish metal.

Oil didn’t fare any better on Tuesday, with May contracts for crude falling more than 2.2 percent to close the day at $95.03 per barrel. The U.S. Energy Information Administration reported Wednesday that supplies of crude expanded more than expected last week, jumping 2.7 million barrels to 388.6 million in the week ended March 29. Wall Street was only expecting an increase of about 2.5 million barrels. In the week earlier, stockpiles of crude had increased by 3.3 million barrels.

Crude has far outperformed gold and silver recently, rising from about $90 per barrel at the start of March to as high as $97.80 on Tuesday before sliding over the subsequent day and a half.

Those that have been running to the broad markets didn’t find much love in equities on Wednesday as commodities demurred. The Dow Jones closed the day off by 111.66 points, the S&P carved off 16.56 points and the Nasdaq finished the day lower by 36.26 points.

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