Stock Market Watch

Gold and Silver Futures Up, Spot Gold Prices Down

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Gold futures edged higher during Asian trading hours on Tuesday as rising expectations over the continuation of quantitative easing from the Federal Reserve kept metal’s inflation-hedge appeal intact. Silver futures also edged higher in early trading on Tuesday.

However, spot gold fell after demand from Asia eased as one of the world’s biggest gold buyers; China is shut until Thursday due to May Day holidays. Furthermore, constant outflows from the world’s top gold-backed ETFs, including the world’s largest fund, the SPDR Gold Trust (ETF) (NYSE: GLD), is also keeping investors sentiment subdued in gold.

At last check, gold futures for June delivery gained 0.24% to $1,470.90 an ounce while spot gold edged down 0.22% to $1,472.51 an ounce. Silver futures added 0.68% to $24.33 an ounce.

In Asia, the physical-side demand, which was the key factor behind gold’ mini-rally in the previous week, subsided as dealers remained in sidelines, waiting for bargains while May day holidays also restricted new orders.

However, the supply was still tight as minting of coins, bars takes some time. The premium of gold bars in Hong Kong so far this week remained at multi-month high of $3 an ounce over spot gold prices in London.

“The problem in the market is the tight physical supply, but physical buying has slowed down. It will take time to refine the metal,” said a dealer in Hong Kong while speaking to Reuters.

Meanwhile, all eyes will be focused on the Fed’s Open Market Committee Meeting, which starts on Tuesday. The Federal Reserve’s extremely accommodating monetary policy has been the key factor behind gold bull runs in last four years. The policy rate statement is expected to be announced on Wednesday.

Holdings of SPDR Gold Trust Fall Again

A data provided Reuters showed that holdings of SPDR Gold Trust fell by another 0.22% to 1,080.64 tons on Monday from 1,083.05 tons on Friday.

 

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edliston
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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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.

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