Gold Prices Edge Lower, Silver Prices Plunge More Than 1%
Gold prices lost some of their ground during Asian trading hours on Tuesday as investors remained wary of taking any fresh bets on the metal ahead of the Federal Reserve’s two day policy rate meeting (FOMC), which kick-starts later today. Silver prices, meanwhile, fell sharply in early trading on Tuesday.
At last check, gold futures fell 0.50% to $1,323.00 an ounce while spot gold lost 0.35% to $1,322.31 an ounce.
Although the Fed is likely to reaffirm its commitment towards accommodating monetary policy (low interest rates), market participants are anxious to know what would be the bank’s stance on the ongoing bond purchase program (quantitative easing).
Earlier in July during the semi-annual congressional testimony, the Fed’s Chairman, Ben Bernanke, said that the tapering of the asset purchases could start later this year; but also added that the bank will keep all options open.
This means that the Fed will keep a close eye on U.S. economic indicators before it eventually decides to pull back the scale of economic stimulating measures.
Lately, economic indicators have been mixed and this might press the Fed to push back its tapering plans until next year. (Pending home sales contracted in June after clocking 6.7% gains in May).
“The (economic indicators) numbers coming from the United States are pretty mixed. Chances are there won’t be any major announcement,” said Ng Cheng Thye, head of precious metals at Standard Bank in Singapore, according to Reuters.
Meanwhile, the physical side demand for bullion remained weak in Asia. Demand has eased ever since the metal breached $1,320 an ounce level mark, said ANZ analysts in a research note to clients.
Silver futures plunged 1.48% to $19.57 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.68%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 1.21%.
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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. |
