Gold Prices Slip, Silver Prices Down as Well
Gold prices eased during Asian trading hours on Wednesday as the physical-side demand remained weak with most Asian markets shut due to Labor Day holiday while investors also adopted wait and watch policy ahead of the Federal Reserve’s policy rate statement, which is expected to be announced later today. Silver prices also edged lower on Wednesday.
At last check, U.S. gold futures for June delivery slipped 0.15% to $1,469.56 an ounce while spot gold fell 0.48% to $1,469.56 an ounce. Silver futures lost 0.48% to $24.07 an ounce.
The Federal Reserve’s extremely accommodating monetary policy has been the key driving force behind metal’s bull runs in last four years. Last year, when the Fed announced its third round of QE, gold prices hit a 11-month high in October.
An easy money environment tends to push up the demand for assets such as gold as investors, fearing currency debasement, seeks safety in inflation-hedge assets.
The Federal Reserve’s two-day policy rate statement is due to be released at 2:15 p.m. EST. However, many market participants expect that the Federal Reserve will be not inclined to change its current monetary policy stance ($85 billion worth monthly bond purchase program) following some weaker-than-expected U.S. economic data releases. Just last week, the Commerce Department’s first quarter GDP showed that the economy expanded by 2.5% annualized rate compared to analysts’ forecast of 3% annualized growth.
Meanwhile, investors’ faith in gold-backed ETF’s continued to decline. A data provided by Reuters showed that holdings of the SPDR Gold Trust (ETF) (NYSE: GLD), which is the world’s largest gold backed ETF, fell by another 0.19% to 1078.54 tons on Tuesday, a lowest level since September 2009.
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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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