Stock Market Watch

Gold Prices and Silver Prices Edge Lower

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Gold prices edged down 1% on Monday- a second straight losing session- as the fear of debt crisis in the euro-region reignited panic among investors towards riskier assets with Spanish 10 year bond yields crossing 6%. Silver prices have also fallen in early trading.

Besides, market sentiment has taken a beating with disappointing Chinese GDP growth data released last week even as U.S. economy grapple with uncertainty.


According to Nick Trevethan, senior commodity strategist at ANZ in Singapore, “The market in general is feeling a bit risk-averse and we can see commodities weaker across the board”. Mr. Trevethen believes that gold prices could pull back as low as $1,620 an ounce.

While U.S. gold lost 1 percent to $1,642 before recovering slightly to $1,643.80, Spot gold also slid 1 percent to a one-week low of $1,640.64 an ounce, and stood at $1,642.66. According to Wang Tao, technical analysis suggests that spot gold could further drop to $1,630 an ounce.

Meanwhile, strengthening dollar also weighed on gold on Monday. The dollar index—which measures the greenback performance against most traded currencies–  rose to its highest in a week and half, extending gains from Friday, as the euro continued to slide due to deteriorating Spanish banking sector. Last week, Spain’s central bank reported that commercial banks were too reliant on the ECB funding, pointing severe liquidity crisis in Spain’s country’s banking sector.

The worsening market sentiment also pulled down some other precious metals as well. Platinum plunged to its lowest level in last two months.  Spot platinum prices slid more than 2 percent to $1,556.5 an ounce, before recovering a bit to $1,562.49.

Platinum is mainly used in auto-catalysts and jewelry industries hence it the metal is directly prone to economic downturns. Platinum prices plummeted more than 20 percent last year due to the highly volatile economic conditions.

Silver also fell to a one-week low of $31.16 an ounce, before recovering to $31.24. In the earlier session, silver lost 2.5%.

In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is currently up 0.43% to $30.68, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is currently up 0.08% to $51.43, and ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently down 0.18% to $10.98.

 

 

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edliston
Post Written By: Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.


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Ed Liston

Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing.

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