Monday was a day of disappointment for riskier assets, gold included, but the yellow metal was able to eke out a small gain in the face of what can only be deemed as a troubling reaction to news of a Spanish banking system bailout. COMEX gold for August delivery added $5.40 to close at $1,596.80 a troy ounce. The PowerShares DB US Dollar Index Bullish (NYSE: UUP) finished the day with a small gain of just 0.13% on light turnover.
Still, the close below $1,600 an ounce for gold was disappointing given that gold futures breached that level in overnight as traders bid up riskier assets ahead of the U.S. open on news that Europen nations have extended a $125 billion loan to Spain to help revive the country's ailing banking system. Unfortunately, traders took that news to mean there is possibility that Spain itself may need a large bailout.
Spain, the Euro Zone's fourth-largest economy, now becomes the fourth European nation to receive some form of bailout assistance after Greece, Ireland and Portugal. Adding additional pressure on gold is the fact that traders are still not convinced the yellow metal's safe haven status has been restored. In the absence of that catalyst, traders may believe there are a few reasons to load up on gold in what is a troubling macroeconomic environment.
The iShares Gold Trust (NYSE: IAU) gained almost 0.3%, but volume was barely half the daily average. The SPDR Gold Shares (NYSE: GLD) advanced almost 0.4%, but volume in that ETF was also well below the daily average.
Due to some decent economic data for a change out of China, industrial metals were bid higher with copper for July delivery gaining almost 6 cents to settle at $3.343 per pound. The iShares Silver Trust (NYSE: SLV) eked out a small gain on volume that wasn't even half the daily average.
China's news was also supportive of gains in platinum futures, which helped the ETFS Physical Platinum Shares (NYSE: PPLT) add almost 1% on the day. The ETFS Physical Palladium Shares (NYSE: PALL) climbed 2%, but volume in that fund was light.
The big problems were seen with the miners, though the declines can hardly be considered surprising. These are stocks after all and Monday was a dreadful day for U.S. equities. That led to a 2.6% plunge for the Global X Silver Miners ETF (NYSE: SIL). The Market Vectors Gold Miners ETF (NYSE: GDX) gave up 1.5% while the Market Vectors Junior Gold Miners ETF (NYSE: GDXJ) was slammed to the tune of 2.5%.