Gold Prices Slide; Silver Prices also Fall Sharply
Gold prices slumped into red territory during Asian trading hours on Tuesday as investors remain in sidelines, waiting for the Federal’s Reserve’s policy statement, scheduled to be announced on Wednesday; however, analysts reckon that prices will continue to hover near lower $1700 an ounce band as bargain hunters will quickly pounce on any opportunity. Silver prices also fell sharply in early trading on Tuesday.
The Federal Reserve is scheduled to kick-off its two-day FOMC meeting on Tuesday; and, even though no major policy shift is expected, investors are little anxious, making sure that Fed’s policy setting committee does not throw any surprises.
Commenting over gold’s possible price course amid FOMC, Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore, said to Reuters, “We are not expecting much, unless there are surprises from the Fed. So I believe gold will still be trading within this band. A lot of investors are also eyeing the outcome of the presidential election in the U.S.”
Lan also added that there is very slim chance of gold plunging further. “On the local market front, there’s still very positive demand from clients. We see more clients coming to purchase gold, especially whenever there’s a price dip,” said Lan.
Earlier on Monday, gold prices found a strong support as it neared lower $1,700 an level. Demand from Jewelers in India was very strong on Monday due to lower prices and stronger rupee. With Festival season approaching very near in India, demand for gold is expected to peak in November.
Nevertheless, according to Reuters, one Singapore based trader believes that demand for physical gold from some other Asian countries such as Indonesia and Thailand is likely to remain subdued owing to stronger local currencies, making gold less appealing as an investing instrument.
At around 6:30 a.m. EST, U.S. gold futures for December delivery were down 0.71 % at $1,714 an ounce.
Silver futures plunged 1.59% to $31.74 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 2.10%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 4.18%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was up 4.52%.
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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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