Precious metals were mixed as Spain’s economy contracted for the second consecutive quarter. Today, Spain’s statistics bureau said the country’s economy contracted 0.3 percent in the first-quarter from the previous quarter. Furthermore, Standard & Poor’s announced it had cut the credit rating of 16 Spanish banks.
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“The Spanish economy is back in recession,” said Martin van Vliet, senior economist at ING. “No expenditure breakdown is available at this stage, but the Bank of Spain has said that domestic demand contracted sharply, and that net exports made a positive contribution to GDP, with imports falling at a faster pace than exports. Spain is clearly rebalancing the painful way. Looking ahead, we fear that things are likely to get worse before they get better,” Mr. van Vliet said in a client note, according to WSJ.
In afternoon trading, the SPDR Gold Trust (NYSEARCA:GLD) increased .23 percent, while the iShares Silver Trust (NYSEARCA:SLV) declined .82 percent. Despite the slight gains in the spot price for gold, gold miners (NYSEARCA:GDX) such as Barrick Gold (NYSE:ABX) and Newmont Mining (NYSE:NEM) both fell about .60 percent. Meanwhile, silver investments such as Silver Wheaton Corp. (NYSE:SLW) and Endeavour Silver (NYSE:EXK) jumped .93 percent and 4.2 percent, respectively.
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Disclosure: Long EXK, AG, HL, PHYS
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