Big drop for bullions on Friday

Gold and silver shed 3.9% and 2.5% on a monthly basis respectively

Bullion prices ended lower on Friday, 30 May 2014. Gold prices on Friday logged their lowest settlement in four months and suffered from their worst monthly decline this year as recent gains in equities lured investors away from the precious metal. Traders also looked at the latest U.S. economic data for guidance on the outlook for metals demand.

August gold fell $11.10, or 0.9%, to settle at $1,246 an ounce on the Comex division of the New York Mercantile Exchange, marking a fifth straight session loss. They lost 3.5% for the week and 3.9% for the month, their biggest weekly and monthly declines of this year.

Silver prices also suffered a weekly loss of 3.8% and monthly decline of 2.5%. July silver shed 33 cents, or 1.8%, to end at $18.68 an ounce on Friday.

Among economic data expected at Wall Street on Friday, Personal Income increased an in-line 0.3% in April, but consumption fell 0.1% against the 0.2% increase that was expected by the consensus. Once again, the report failed to show any pent-up demand resulting from the severe winter weather. Core PCE prices rose 0.2%, as expected.

The Chicago PMI increased to 65.5 in May from 63.0 in April. The consensus expected the Chicago PMI to fall to 60.3. New order levels accelerated as the related index increased to 70.2 in May from 68.7 in April. That did not translate into stronger production as the index fell to 64.4 in May from 70.5. Instead, much of the new orders growth was marketed for backlogs as that index increased to 61.4 from 54.9. The strength of the backlogs index should support elevated production levels.

The final reading for the May University of Michigan Consumer Sentiment Index increased to 81.9 from 81.8 in the preliminary reading. Consumer sentiment is still down from an 84.1 reading in April. The consensus expected the Consumer Sentiment Index to fall to 81.4. The Current Conditions Index fell to 94.5 in the final May reading from 95.1 in the preliminary reading. The Consumer Expectations Index increased to 73.7 from 73.2.

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