Gold Prices Ease Further, Silver Prices Plunge 1%
Gold prices pared initial gains to turn lower during Asian trading hours on Tuesday as demand for safe-haven bets is waning amid significantly improving macroeconomic environment in the U.S. Silver prices, meanwhile, fell sharply on Monday.
Earlier today, gold prices, which fell for the third successive session on Monday, recovered some of its lost ground as the dollar eased. However, by European trading hours the dollar bounced back, paring most of its losses.
At last check, U.S. gold futures for June delivery lost 0.28% to $1,430.30 an ounce while spot gold slipped 0.04% to $1,429.46 an ounce. Silver futures plunged 1.06% to $23.45 an ounce.
The U.S. dollar has been propelled by spate of better-than-expected U.S. economic data releases. Besides, improvement in the U.S. economic outlook has also triggered concerns over the extension of the Federal Reserve’s QE3. In its weekend report, the Wall Street Journal indicated that policymakers are developing an exit strategy from the ongoing ultra-loose monetary policy.
Earlier on Monday, the Commerce Department’s data showed that retail sales rose 0.1% in April against economists’ forecast for 0.3% decline.
With retail spending, which is one the pillars of the U.S. economy (retail spending accounts for about 30% of the U.S. GDP), showing better-than-expected reading, following two back-to-back solid job data (latest non-farms and weekly jobless claims), and investors risk appetite is rising.
Investors are drifting away from gold, often regarded as hedge in times of economic uncertainty.
“Stocks are looking more attractive for investors. Gold will continue in the downward trend. It might test $1,400,” said Brian Lan, who is the managing director of GoldSilver Central in Singapore, according to Reuters.
“I don’t see any data that could possibly push gold prices up,” added Lan.
Meanwhile, holdings of the SPDR Gold Trust (ETF) (NYSE: GLD) were recorded at 33.811 tons, which was slightly short of its lowest level recorded since March 2009, according to 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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