Gold Prices Settle Above $1400, Silver Prices Rise Sharply
Gold prices edged higher for the third successive session on Monday as last week’s two-year low drop in prices continued to attract bargain hunters from Asia, signaling that the metal might have “bottomed out”. Silver prices also edged higher on Monday.
Gold futures for June delivery gained $25.60, or 1.8%, to settle at $1,421.20 an ounce while spot gold was last up 1.69% $1,427.50 an ounce.
Gold futures slumped 7% while cash gold fell about 5% after series of weak economic data from the U.S. and China triggered deflationary concerns last week, setting off massive sell-off pressure on industrial metals and other commodities.
Besides, the Cypriot government’s decision to sell its bullion holdings to fund a part of its bailout requirements also raised fears that many highly indebted countries could follow the suit also weighed on gold prices.
However, a two-year low dip in prices resulted in heavy physical-side demand from Asia with dealers in Hong Kong and Singapore running out of gold bars, nuggets and coins. On Monday, persistent demand helped the metal to breach $1400 an ounce level mark, which in turn triggered technical buying.
“Physical buying has really taken a lot of people by surprise, and many companies are struggling to keep up demand,” said Jan Skoyles, head of research at The Real Asset Co., a precious-metals investment platform provider, according to the MarketWatch.
“This suggests that we are now seeing a bottom in the gold market as bargain hunters rush in,” added Skoyles.
Still, investors’ faith in gold remains dim, which is reflected by constant outflows from the world’s largest gold backed ETF, the SPDR Gold Trust (ETF) (NYSE: GLD).
“Physical demand is giving the price a psychological boost, but don’t think that could make up for the 65-tonne outflows from ETFs last week,” said Ole Hansen, Saxo Bank senior manager, according to Reuters.
Last week, holdings of the SPDR Gold Trust fell to a three-year low level. On Friday holdings contracted a further 0.88% from Thursday, according to Reuters.
Silver futures climbed 1.92% to $23.40, at last check.
In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 1.25%, and the ProShares Ultra Silver Trust (ETF) (NYSE: AGQ) was up 1.21%.
More Posts by this author
- Stocks End Higher
- Gold and Silver Prices Rise Sharply
- Stocks in Green in Mid-Day Trading
- Forex Market Update: U.S. Dollar Slips against Yen and the Euro
- Stocks Gain in Early Trading
- Gold Prices Continue to Climb, Silver Prices Rise More Than 2%
- Stock Futures Point to Higher Start
 |
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.
|
