Gold Prices Gain; Silver Prices Also Edge Higher
Gold prices edged higher during Asian trading hours on Thursday after falling in previous session amid expectation that the Federal Reserve will keep its extremely accommodating monetary policy unchanged. Silver prices have also edged higher in early trading on Thursday.
At last check, December gold futures gained 0.43% to $1,339.80 an ounce while spot gold rose 0.57% to $1,339.31 an ounce.
The SPDR Gold Trust (ETF) (NYSE: GLD) was up 0.37% in premarket trading to $129.16.
Silver futures added 0.52% to $22.73 an ounce.
Investors’ faith in gold revived somewhat last Tuesday after the Labor Department’s weaker-than-expected non-farm payrolls data confirmed that the U.S. economy was going through a sluggish recovery.
The data stoked expectations that the Fed, which meets on Oct. 29-30 for the next open market committee meeting, might extend or even expand its multi-billion dollar asset purchase program until early next year.
Gold price have lost about 20% year-to-data amid speculation that the Fed might start to scale down its gold-supportive asset purchase program before the year-end.
On Thursday, all eyes will be on new home sales data. In case, home sales also show weakness then policymakers will have a very strong case in favor of extending its quantitative easing.
“The mortgage rate has been rising since June and we know jobs data was not as good as expected in September. We want to know how these factors affect home sales…If sales fall well below 425,000, the Fed will more likely be in favor of postponing the tapering to next year”, said Joyce Liu, an investment analyst at Phillip Futures, according to Reuters.