Gold Prices Slip Again, Silver Prices Plunge over 1%
Gold prices pared initial gains to trade lower during Asian trading hours as investors remain wary in the wake of fragile quarterly results from companies across the world while spotlight will also remain on third quarter GDP data from the U.S, scheduled to be released today. Silver prices also fell sharply in early trading on Friday.
At around 6:30 a.m. EST, spot gold edged down 0.43% to $1,703.80 an ounce while U.S. gold futures for December delivery fell 0.5% to $1,704.50 an ounce.
Bullion is now on course to post third successive weekly loss.
Earlier on Thursday, bullion rebounded after fiscal third-quarter GDP data from the United Kingdom showed most robust numbers in last five years, pointing towards possible economic recovery. Just a day before the preliminary manufacturing PMI data from China and the U.S. also showed uptrend in economic activities.
Nevertheless, a very disappointing earnings season has shaken the market sentiment. After Apple and Amazon.com rattled investors on Thursday, it was the turn of world’s biggest telecom equipment manufacturer, Ericsson which reported a very lackluster quarterly result.
While earlier this week the Federal Reserve reaffirmed its commitment towards shoring up the U.S. economy through its bond purchase program, bullion investors find themselves in very precarious situation for two reasons. Firstly, the uncertainty with regard to U.S. Presidential elections and imminent threat of ‘fiscal cliff’ will keep investors on tenterhooks, dismal quarterly earnings and slashing of profit guidance from many Wall Street heavy weights will put a question mark on gold’s inflation-hedge appeal.
A stronger dollar also weighed on gold’s prices after euro fell vis-à-vis the greenback. Ambiguity over Spain’s bailout and flagging business confidence in the euro zone has put the euro under pressure.
Meanwhile, investors will keep a close eye United States’ third quarter GDP data. Economists are expecting 1.9% GDP growth in third quarter.
Silver futures plunged 1.26% to $31.68 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 1.25%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 2.73%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was up 2.29%.
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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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