Gold Prices Extend Gains, Silver Prices Also Up
Gold prices continued extending gains during Asian trading hours on Wednesday as bullion investors cheered the reelection of Barack Obama as the President of the United States. President Obama has been a strong supporter of Federal Reserve’s quantitative easing program; and, according to analysts, the precious metal prices could bounce back in the near to midterm as the ongoing economic stimulating program will most likely continue under his leadership.
At around 6:00 a.m. EST, spot gold gained 0.76% to $ 1,728.46 an ounce while U.S. gold futures for December delivery edged up 0.67% to $ 1,726.50 an ounce.
Bullion, which peaked at $1,795.69 an ounce earlier in October following the launch of the third round of quantitative easing from the Federal Reserve, retreated sharply as investors stayed in sidelines, waiting for the outcome of Presidential elections. However, on Tuesday gold prices rebounded sharply, gaining almost 2% for the day as financial markets speculated that President Obama might well get the second term at office even as the ballot counting was on.
Speaking to Reuters over the election results and its implication on gold’s prices, Yuichi Ikemizu, branch manager at Standard Chartered Bank, Tokyo said that Obama’s victory augurs well for gold’s prices as QE3 is set to continue. “I think gold will be going back to $1,800 this year. We are going to see higher gold (prices) in the coming days, weeks and months,” commented Ikemizu.
In its report ANZ bank also sounded bullish on gold prices. “We forecast gold will end the year at $1,780 an ounce and peak late in 2013 at around $1,890 an ounce,” wrote strategists at ANZ bank.
“We think there could be upside risks to these forecast highs, in the event of additional U.S. policy easing or signs of inflation following the liquidity injections of the past four years,” added the report.
Silver futures, meanwhile, added 0.33% to $32.14 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.10%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 0.28%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was up 0.15%.
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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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