Gold and Silver Prices Gain as Dollar Retreats
Amid low volume trading, gold prices ticked higher during Asian trading hours on Wednesday as weakness in the U.S. dollar, as result of remarks made from two top Silver prices also edged higher in early trading on Wednesday.
At last check, gold futures for August delivery edged up 0.16% to $1,245.30 an ounce while spot gold gained 0.38% to $1,246.10 an ounce.
The metal’s safe haven appeal also received some support on Wednesday after China’s official Purchasing Mangers’ Index (PMI) showed that service sector activities fell to its lowest level in last nine months in June.
Nevertheless, no major gains are in sight with well-known commodity investor, Jim Rogers suggesting that the metal has not yet bottomed out even as constant liquidations from gold-backed ETFs will keep investors wary of gold.
Attending an event in Singapore, Rogers said, “I am not convinced this is the bottom,” according to Reuters.
“Where that bottom will be I have no idea. Perhaps it will be $900-$1,000,” added Rogers.
If the metal do sinks further to this level then it will be almost 50% down from its all-time high of $1,920.30 an ounce, hit in September 2011.
Bullion’s inflation hedge appeal received a severe blow in June after the Fed’s Chairman Ben Bernanke finally laid out pullback strategy for $85 billion worth monthly bond purchase program.
The metal has logged 12 successive years of bull runs until 2012 as extremely loose monetary policies from global central banks, especially the Fed, stoked inflationary concerns, prompting investors to take bullish positions on the yellow metal.
On Tuesday however, two Fed officials pacified investors’ nerves by saying that the winding down of the QE3 will not commence immediately.
Silver futures were climbed almost 1% to $19.50 an ounce.
In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 2.73%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 5.08%.
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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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