Gold Prices Rise Sharply, Silver Prices also Climb More than 2.5%
Gold prices continued to make strong gains during Asian trading hours on Monday thanks to technical buying, which ensued after the metal breached $1400 level. However, overall sentiment still remains bleak, reflected by persistent outflows from some of the prominent gold-backed ETF’s such as the SPDR Gold Trust (ETF) (NYSE: GLD). The metal is down about 15% year-to-date. Silver prices also rose sharply in early trading on Monday.
At last check, gold futures for June delivery leaped 2.64% to $1,432.40 an ounce while spot gold jumped 2.09% to $1.433.20 an ounce. Silver futures climbed 2.55% to $23.545 an ounce.
Having momentarily plunged to a two-year low level on last Monday, market participants are curious about the outlook of gold prices.
Although it is unclear where the yellow metal’s safe-haven appeal would burnish in the short term, for the time being, the metal is finding some support from strong physical-side demand from Asia.
In a note to clients, Edward Meir, metals analyst at futures brokerage INTL FCStone, said, “It remains to be seen which of these offsetting forces eventually wins out and exerts its influence over gold prices,” according to Reuters,
“Our guess is that the sharp bounce in retail buying will likely dominate and succeed in sending prices higher over the course of the next week or two,” added Meir.
The metal came under tremendous sell-off pressure on last Monday after some unexpectedly weak economic data release both from the U.S. and China triggered panic selling across-the-board.
Industrial metals and commodities felt the maximum brunt.
However, some bargain hunting, strong demand from Asia and spate of disappointing earnings releases from blue chip companies provided a little support to metal.
Meanwhile holdings of the world’s largest gold-backed exchange traded fund, the SPDR Gold Trust fell by another 0.88% on Friday from Thursday, showed a data provided by Reuters.
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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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