Stock Market Watch

Gold and Silver Prices Rally

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Gold prices extended gains during Asian trading hours on Friday and were  on course to post second successive weekly gains as central banks efforts to shore up the economy through extremely accommodating policies have pushed up a bit metal’s inflation-hedge appeal. Silver prices also edged higher in early trading on Friday.

At last check, gold futures for June delivery climbed 1.23% to $1,485.70 an ounce while spot gold jumped 1.15% to $1,483 an ounce. Silver futures leaped 1.89% to $24.28 an ounce.

Still, gains could remain capped in the near term as constant outflows from the world’s top gold-backed ETF, the SPDR Gold Trust (ETF) (NYSE: GLD) might keep investors indecisive even as questions are arising over for how long the physical-side demand from Asia will remain unusually strong.

Strong demand for physical gold from Asia following the spectacular plunge in prices on April 16, has been one of the key factors behind gold’s mini-rally. The metal hit a two-year low of 1,321 an ounce on mid-April as panic sell-off ensued following the release of series of dismal economic indicators.

For the time being, gold has found support from the central banks. The European Central Bank (ECB), as expected, slashed benchmark interest rate by 25 basis points to record low level of 0.50% on Thursday.  A day earlier, the Federal Reserve also pledged to continue with its ongoing multi-billion-dollar monthly bond purchase program.

Investors will also keep an eye on the Labor Department’s non-farm payrolls data for April on Friday. Any weakness would mean that QE might be extended for a longer period of time, which would be gold supportive.

Meanwhile, holdings of the SPDR Gold Trust fell another 0.56% to 1,069.22 tons on Thursday – the steepest level since September 2009, showed a data provided by Reuters.

 

 

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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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