Updated from 12:56 p.m. EDTPrices of precious metals moved lower Monday as concerns over a slowing U.S. economy, together with oil's slight decline from its all-time high above $75, reduced market anxiety over inflation. Gold closed down $8.70 at $626.10 per ounce, while silver was off 29.5 cents at $11.10 an ounce. "Over the last two years, the most consistent focus of the gold market has been on the direction of the economy," states a report from Chicago-based NS Futures, published Monday. It warned investors to remain observant of the stock market as a key indicator of future economic growth. Concerns about the U.S. economy were magnified by Friday's weaker-than-expected payroll report, even as rising wage growth may compel the Federal Reserve to continue tightening. Meanwhile, the European Central Bank made hawkish comments last week and the Bank of Japan is expected to end its four-year policy of "quantitative easing" later this week. Shares of the bullion-exchange-traded funds iShares COMEX Gold Trust ( IAU), streetTRACKS Gold Shares ( GLD) and iShares Silver Trust ( SLV) edged lower, in line with metals prices. Barrick Gold ( ABX) and Newmont Mining ( NEM) were basically unchanged in recent trading, having dipped slightly earlier in the day. Among the other precious metals, platinum closed the trading session down $18.9 at $1,232 an ounce, while palladium was off $7.15 at $324 an ounce. Shares of North American Palladium ( NAP) which at one point were trading down 4% in reaction, recovered later and were trading less than 2% down late afternoon, while those of Stillwater Mining ( SWC) were off about 1.5%, slightly more than earlier in the trading session. Unlike North American Palladium, Stillwater is protected from palladium price drops through its use of financial derivatives. In the base-metals sector, all eyes were on Alcoa ( AA), which is slated to report second-quarter earnings after the close. While shares of Alcoa were off only slightly, down 0.2%, shares of Canada-based competitor Alcan ( AL) were up 1.1% in anticipation of strong earnings that are expected to be released on Aug. 2. Alcan uses hydroelectric power to generate a significant portion of its required energy, and therefore will be less impacted than Alcoa by possible spikes in the price of electricity.
Aluminum spot prices on the London Metal Exchange (LME) were recently trading above the critical $2,500 a ton level. Copper futures closed modestly higher at $3.585 a pound, up 3.75 cents a pound. Shares of Phelps Dodge ( PD), the largest U.S. copper company, were recently up 14 cents to $80.38. Copper stocks on the LME were reported having risen slightly to 92,225 metric tons, up 2,625, according to reports from Dow Jones and NS Futures. LME Nickel stocks were reported down 204 tons to 9,462, propelling the spot price for the metal to approximately $25,200 a ton, up over 1% and is now at levels not seen since the LME first traded nickel in 1979, according to a report by AFP. Nickel prices have risen approximately 17% in the past 30 days compared to a flat S&P 500 and a 2% rise for gold. Shares of nickel miners Inco ( N) and Falconbridge ( FAL), however, were each down more than 1%.