Precious metals and related exchange traded funds rallied Friday after poor U.S. data underscored the ongoing weakness associated with the coronavirus shutdowns.
Among the best performing non-leveraged ETFs of Friday, the Global X Silvers Miners ETF (NYSEArca: SIL) increased 7.0% and the VanEck Vectors Gold Miners (NYSEArca: GDX) advanced 3.8%.
Meanwhile, the SPDR Gold Shares (NYSEArca: GLD) rose 0.6% on Friday as Comex gold futures were 0.7% higher to $1,753.8 per ounce. The iShares Silver Trust (SLV) gained 5.0% and was closing in on its long-term resistance at the 200-day simple moving average while Comex silver futures were 5.4% higher to $17.02.
Precious metals markets strengthened on another round of safety bets Friday.
Investors are eyeing economic and political headlines that “increase global worries, as China tension becomes [a U.S. presidential]election issue,” George Gero, managing director at RBC Wealth Management, told Market Watch.
On the economic front, updated U.S. retail sales data showed a record 16.4% plunge in April or fell 16.2% excluding automobile sales and gas price after lockdown measures shut down most of the economy in a bid to contain the worst viral outbreak in more than a century.
“Everybody must have realized it, but it’s just more evidence that the reality is this is a pretty bleak economic picture right now,” Phil Streible, chief market strategist for Blue Line Futures LLC, told Bloomberg. “People are continuing to pile into gold because that weak economic picture is going to continue to drive interest rates lower.”
Furthermore, the metals market gained momentum on rising tensions between the U.S. and China after the Trump administration moved to block shipments of semiconductors to Huawei Technologies, and as President Donald Trump blamed China for its mishandling of the coronavirus outbreak.
“The souring of US-China relations has been lifting the safe-haven gold, which is fast approaching April’s 7-year high,” Raffi Boyadjian, senior investment analyst at XM, said in a daily research note.
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