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Gold Prices Remain Stable as Market Awaits Fed’s Policy Statement; Silver Prices also Edge Higher

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Gold prices stayed steady on Wednesday, supported by stronger equities as market participants keenly await Federal Reserve’s monetary policy statement for coming months, hoping that central bank would pave the way for another round of quantitative easing. Meanwhile, silver prices are also gaining in trading today.

If expectations of Fed’s assets buying program turns out to be true then it will provide great boost to gold as dollar would weaken, simultaneously boosting U.S and global equities as well.


While spot gold nearly stayed flat at $1,641.81 per ounce by 0248 GMT, having risen as high as $1,648.91 on Tuesday as the Dow and the S&P 500 rebounded after strong earnings and positive outlooks from big manufacturers, U.S. gold futures were at $1,642.90 per ounce, losing 0.05 percent.

Since February when bullion hit a record high of $1,790 an ounce, less dovish tone from the fed along with some stings of positive economic data in March put the pressure on the yellow metal.

Commenting over FOMC meeting, Ronald Leung, director of Lee Cheong Gold Dealers in Hong Kong, said to Reuters, “I don’t think they will announce the QE3, but Bernanke’s speech may offer some hints. We don’t know, but we can see that other nations have already cut interest rates”.  Reflecting over gold prices in the short to middle term, Mr. Leung said, “I think $1,650 or $1,655 will be the cap for the time being. We can see the downside at $1,625.”

Fed’s policy statement is expected to be released at 16:30 GMT followed by a news conference, attended by Ben Bernanke.

Meanwhile, stock markets worldwide traded higher on Wednesday as better than expected corporate earnings, successful debt auctioning in Netherlands and an improving housing data in the U.S. stoked investors risk appetite. Lately, notwithstanding gold’s appeal as a safe investment instrument, the metal has tracked equities, oil prices and other commodities, as uncertain environment left investors at loose end.

Meanwhile, silver gained 0.1 percent at $30.80 an ounce, while spot palladium advanced 0.4 percent at $665.83 an ounce. Platinum after sharp fall yesterday climbed up 0.6 percent at $1,548.49 an ounce.

In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is currently up 0.37% to $30.04, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is currently up 1.04% to $49.68, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently  up 0.35% to $11.46.

 

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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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