Precious metals prices were falling again Wednesday in New York on the back of a rallying dollar.
June-dated gold contracts were dipping $3.90 at $673.40 an ounce in recent action. Silver was dropping 7 cents at $13.30 an ounce.
The bullion exchange-traded funds that own stocks of the metals were slipping as well, with the
iShares Comex Gold Trust
iShares Silver Trust
both off about 0.6%.
Helping boost the greenback was a Commerce Department report showing a 3.1% jump in factory orders for March. The consensus forecast was for 2.1% growth. In addition, the figure for February was upwardly revised.
"This was very good news coming right on the heels of Tuesday's strong
Institute for Supply Management report," says Ellen Beeson Zentner, an economist at Bank of Tokyo-Mitsubishi UFJ in New York. "This pushes worries about the business sector aside, and now we can concentrate on the housing slump and its effect on the consumer."
The recent economic news should strengthen what has been an ailing dollar lately, she says.
Foreign exchange dealers seemed to agree, and they brushed off a weak jobs report from payroll processor ADP. One euro was buying $1.3597, down from $1.3612 in the prior session. The dollar was trading for 120.11 yen, vs. 119.77 yen previously.
The price of precious metals and the value of the dollar tend to move inversely over time.
In the official sector, the European Central Bank says it sold 195 million euros of gold and receivables, or about 12 tons, last week, down from around 17 tons the week before.
Turning to the miners, Prudential upped its rating on
to neutral from underweight.
The move came a day after Standard & Poor's placed Newmont on negative credit watch, citing major capital spending requirements over the next few years. Newmont currently holds a BBB-plus corporate rating.
Newmont shares were recently rising 1%.
reported a first-quarter loss of 18 cents a share after it spent more than $500 million exiting certain hedging instruments. However, adjusted earnings of 45 cents a share beat the consensus by 10 cents. The stock was rallying 6%.
Also in the precious metals patch, silver producer
posted worse-than-expected first-quarter earnings. Still, the company did report dramatically lower costs for silver production of 88 cents an ounce in the quarter, down from $4.19 in the same period of 2006.
The company says higher revenue from byproduct metals was the driving factor behind the falling costs.
As for base metals, copper was edging a penny higher to $3.64 a pound on the Comex.
"I don't think there is any reason for copper prices to stop here unless something bearish appears on the horizon," says Neil Buxton, managing director at London-based specialty firm GFMS Metals Consulting. "Any price dips will be seen as a buying opportunity by many."
Buxton says the strength of the Chinese economy, minor production losses from Africa and the threat of a strike in Peru could keep the copper rally intact. Prices have surged from around $2.40 a pound in early February.
Elsewhere in industrial metals, Banc of America Securities upped its rating on titanium producer
RTI International Metals
to buy from neutral, sending the shares up 4.4% in recent action.
Among soft commodities, cocoa futures were rallying more than 1% to $1,855 a ton.