Fool's Gold Report: Futures Jump $20 on Stock Market Rout; Miners Mixed

Although we don't believe in timing the market or panicking over daily movements, we do like to keep an eye on market changes -- just in case they're material to our investing thesis.

February started off on a terrible footing for stock investors, with major market benchmarks falling between 2% and 3% as of 3 p.m. EST, but today's rout for stocks was good news for gold and silver. Futures pit trading for gold ended this afternoon with a $20 rise for the yellow metal, closing just shy of $1,260 per ounce. Silver finished up almost $0.29 to $19.41 per ounce. Those rises translated into gains for popular bullion ETFs, with the SPDR Gold Shares (NYSEMKT: GLD  ) and the iShares Silver Trust (NYSEMKT: SLV  ) both climbing about 1% as of 3 p.m. EST. Platinum-group metals prices were mixed, though, with platinum climbing $13 to $1,382 per ounce but palladium falling $1 to $699 per ounce.

Image sources: Wikimedia Commons; Creative Commons/Armin Kubelbeck.

One catalyst for the stock market's decline was a weak figure from the Institute for Supply Management's Purchasing Managers' Index, which hit its lowest level since May 2013 and fell much more than investors had expected. The implied sluggishness in U.S. manufacturing activity reversed the trend toward greater strength and raised the possibility that the Federal Reserve won't taper its bond-buying activity under quantitative easing as quickly as most now expect. The central bank has reduced its monthly purchases by $10 million at each of its past two meetings.

Yet many economists believe January figures on the economy might reflect one-time weather effects, with many companies citing extremely cold conditions throughout much of the country in discussing their future guidance. If January figures turn out to be a lone blip, then the stock market could recover quickly and gold's gains could prove short-lived.

On the mining side of the business, mixed sentiment prevailed among both gold and silver miners. The Market Vectors Gold Miners Index (NYSEMKT: GDX  ) reflected the crosscurrents in the market, rising just 0.2% as of 3 p.m. EST, but certain mining stocks bore the brunt of investors' bearish sentiment. Newmont Mining (NYSE: NEM  ) fell more than 2% as a couple of analysts piled on with negative assessments of the gold miner -- HSBC cut its rating to neutral and Citi dropped its price target from $26 per share to $23. After last week's poor production update from Newmont, the miner needs to reestablish its ability to grow if it wants to reassure gold investors that it can benefit as much as its peers from an eventual recovery in gold prices.

Gold investors shouldn't take much heart in the price action in the yellow metal so far, as in the past stock market corrections would likely have produced even larger moves upward for gold. It's unclear whether gold will be able to put together a really large advance to convince gold bulls that a positive market environment could really be coming back for precious metals.

Don't give up on stocks for growth
Gold grew along with stocks in the 2000s, even though many investors said that finding good growth stocks just couldn't be done. But David Gardner has proved them wrong time, and time, and time again with stock returns like 926%, 2,239%, and 4,371%. In fact, just recently one of his favorite stocks became a 100-bagger. And he's ready to do it again. You can uncover his scientific approach to crushing the market and his carefully chosen six picks for ultimate growth instantly, because he's making this premium report free for you today. Click here now for access.

Read/Post Comments (0) | Recommend This Article (4)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2821322, ~/Articles/ArticleHandler.aspx, 8/29/2015 3:02:52 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

Today's Market

updated 17 hours ago Sponsored by:
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 1.21 0.06%
NASD 4,828.33 15.62 0.32%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

8/28/2015 3:59 PM
GDX $14.25 Up +0.46 +3.34%
Market Vectors Gol… CAPS Rating: ***
GLD $108.70 Up +0.97 +0.90%
SPDR Gold Trust (E… CAPS Rating: **
NEM $17.17 Up +0.47 +2.81%
Newmont Mining Cor… CAPS Rating: ***
SLV $13.92 Up +0.12 +0.87%
iShares Silver Tru… CAPS Rating: ***