Gold Prices Extend Gains, Silver Prices Also Jump
Gold prices rose more than 1% on Friday after the yellow metal breached $1,400 an ounce mark, triggering technical buying; nonetheless, it is on course to post fourth successive weekly loss after slumping to two-year low level on Monday. Silver prices also edged higher on Friday.
At last check, U.S. gold futures for June delivery climbed 1.37% to trade at $1,411.60 an ounce while spot gold jumped 1.54% to $1,412.16 an ounce. Silver futures leaped 1.57% to $23.61 an ounce.
Gold prices were hammered on Monday after series of disappointing economic data releases from the U.S. and unexpectedly weak third quarter GDP data from the world’s top 2 economy, China, fanned fears that global economy was losing its momentum, stoking deflation concerns, and triggering massive sell-off of industrial metals and other commodities.
Moreover, fears that Cypriot government’s decision to sell bullion to cover part of its bailout requirements would serve as an example for other indebted countries also prompted investors cut positions in gold.
Holdings of SPDR Gold Trust (ETF) (NYSE: GLD), which is the world’s largest gold-backed ETF, dropped to a three-year low level, earlier this week, a data provided by Reuters showed. The market is also abuzz with speculation that a longtime gold bull and well-known hedge fund manager, John Paulson might have unwounded his position.
However, the sharp dip in prices boosted the physical-side in demand in Asia with dealers in Hong Kong and Singapore running out of gold bars and American coins on Thursday.
Commenting over the rebound in prices, one Singapore based dealer said to Reuters, “Prices have suddenly jumped but I guess it’s because gold has broken the $1,400-level again. Technically, people are just buying up again.”
“Physical buying from Thailand is not that strong, surprisingly. We are seeing demand from Indonesia and local buyers, and also little bit from India,” added the dealer.
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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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