This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Gold Drops as Bank of Japan Stays Pat

NEW YORK ( TheStreet) -- Gold prices were dropping on Tuesday after the Bank of Japan chose to continue its current purchases of government bonds, despite recent pitfalls in the bond market there.

Gold for August delivery at the COMEX division of the CME was falling $12.30 to $1,373.70 an ounce. The gold price traded as high as $1,387.20 and as low as $1,364.50 an ounce, while the spot price was down $13.58.

In its latest statement on monetary policy, the Bank of Japan said it would continue to purchase at an annual pace 50 trillion yen ($516.18 billion) of Japanese government bonds.

Central banks, including the Federal Reserve, the European Central Bank, the Bank of England and others, have been implementing monetary stimulus into the global economy since the financial crisis of 2008. Traders, investors and analysts view central bank quantitative easing as a policy of inflation, which makes gold an attractive hedge against such an event.

Volume for gold futures trading has been light as China is on holiday for the first half of the week.

Mihir Dange, an options trader for Grafite Capital, said the double-digit drop in gold prices due to the news from the Bank of Japan didn't surprise him as a single trade can easily move a thinly traded market.

Silver prices for July delivery were slipping 33 cents to $21.60 an ounce, while the U.S. dollar index was off 0.38% to $81.38.

Traders are looking ahead this week to the jobless claims report due Thursday, but could expect broader market-moving news next Wednesday when the Fed releases its latest policy-making statement and economic projections. Chairman Ben Bernanke will follow those reports with a press conference.

Gold mining stocks were mostly lower on Tuesday. Shares of Kinross Gold (KGC - Get Report) were dropping 4.3%, and shares of Yamana Gold (AUY - Get Report) were off 4.2%.

Among volume leaders, Barrick Gold (ABX - Get Report) was slumping 1.6%.

Gold ETF SPDR Gold Trust (GLD) was sliding 0.78% to $132.90 a share, while iShares Gold Trust (IAU) was off 0.89% to $13.35.

-- Written by Joe Deaux in New York.

>Contact by Email.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
IAU $12.45 -0.24%
GLD $123.24 -0.33%
ABX $19.11 -1.34%
AUY $4.71 -4.85%
KGC $5.64 -1.05%


Chart of I:DJI
DOW 17,891.16 +117.52 0.66%
S&P 500 2,081.43 +16.13 0.78%
NASDAQ 4,817.5940 +42.2360 0.88%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs