Gold Prices Settle Lower, Silver Prices Also Fall
Gold prices fell sharply on Thursday as pair of better-than-expected U.S economic data releases fuelled concerns that the Federal Reserve, which is scheduled to hold its FOMC next week, could start decelerating the pace of economic stimulating measures. Silver prices also fell sharply in trading on Thursday.
Both retail sales for May and weekly jobless claims data bettered analysts’ expectations, underpinning the fact that the U.S, economy is rebounding— notwithstanding budget cuts in Washington.
The Fed’s ultra-loose monetary policy, especially after the credit crisis of 2008/09, has been the key driving force behind gold’s bull runs until 2012.
However, with job market showing significant improvement lately, speculation is rising that the Fed would sooner than latter start tapering its $85 billion worth monthly bond purchase program, which in turn could weigh on the metal’s inflation-hedge appeal.
Just last week, non-farm payrolls data showed that the U.S. economy added more-than-expected jobs.
The Federal Reserve’s current round of quantitative easing or QE3 is explicitly tied to an improvement in the labor and housing market.
A data provided by Reuters showed that gold prices are down about 27% after it touched a record high of $1,920 in September 2011.
Gold futures for August delivery fell $14.20 or 1% to $1,377.80 an ounce while spot gold was last down 0.74% to $1,377.46 an ounce. In late trading, the SPDR Gold Trust (ETF) (NYSE: GLD) was down 0.87% to $133.08.
Silver futures were last down 1.01% to $21.57 an ounce.
Meanwhile, the physical side demand in Asia remained weak. While demand from China helped limiting the losses, demand from India has fallen sharply after the government decided to raise import tariffs on gold in order to cut the nation’s burgeoning trade deficit.
More Posts by this author
- GameStop Shares Upgraded (GME)
- Stocks End Lower
- Gold Prices Settle Higher; Silver Prices Also Gain
- Stocks Trade Lower
- Restoration Tops Q1 Estimates, Lift FY Guidance (RH)
- Stocks Slightly Lower in Early Trading
- Forex Market Update: Yen Gains against the U.S. Dollar
 |
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.
|
