Gold Futures Fall, Silver Futures Edge Higher
Gold futures fell further during Asian trading hours on Friday and are on course to log worst quarterly performance since 1968 as investors continued to liquidate positions on safe haven bets after the Federal Reserve, earlier this month, laid out the pullback strategy of its multi-billion dollar bond purchase program. Silver futures, meanwhile, edged higher in early trading on Friday.
Moreover, last day before the month and quarter end also triggered sell-off as hedge funds and money managers look to rebalance their portfolios.
At last check, gold futures for August delivery fell 0.90% to $1,200.70 an ounce while spot gold edged up 0.27% to $1,202.71 an ounce.
Ever since the Federal Reserve Chairman, Ben Bernanke signaled at possible winding down of the $85 billion worth bond purchase program by the year end, bullion has come under tremendous pressure.
The Fed’s extremely accommodating monetary policy since financial crises of 2008/09 stoked metal’s inflation hedge appeal, with the metal hitting its record high of $1,920 an ounce in September 2011.
On Thursday, gold futures fell 1.5% as liquidations of inflation-hedge and safe haven bets intensified following the release of unexpectedly strong consumer spending, personal income and housing data. In addition, the job market data was also reasonably satisfactory. Earlier today, “stop loss” was triggered after the metal briefly fell below $1,200 an ounce mark, traders said, according to Reuters.
A data provided by Reuters showed that gold, which plunged 25% in the second quarter, is now on its way to post its worst quarterly performance since 1968.
Meanwhile, the physical side demand from Asia, especially from the world’s second biggest consumer China continued to remain weak. Cash gold prices received some support only due to bargain hunting.
India, the world’s leading gold consumer, has already erected import tariffs on gold since May in order to cut its current account deficit.
Silver futures climbed 1.49% to $18.81 an ounce, at last check.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.67%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 1.85%.
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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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