Stock Market Watch

Gold Climbs Above $1,330 Mark, Silver Gains Nearly 2%

by ·


Gold prices were heading towards a higher close on Wednesday as the dollar fell after the producer price index for July showed absence of any inflationary pressure, which could prompt the Federal Reserve to extend its bond purchase program for an extended period of time.

At last check, gold futures for December delivery gained 0.95% to $1,333.00 an ounce while spot gold climbed 1.01% to $1,334.06 an ounce. SPDR Gold Trust (ETF) (NYSE: GLD) was last up 0.90% to $128.89.

Silver futures were last up 1.93% to $21.75 an ounce.

The dollar index, which rose during Asian trading hours, pared gains to turn lower after the Labor Department said that the producer prices remained flat in July. Economists polled by Reuter expected an increase of 0.3%. The ‘core’ index, which does not include energy and food, inched up just 0.1%, below economists’ forecast for 0.2% gain. Lack of inflationary pressure suggests that the U.S. economy is still not moving at a desired pace.

Earlier on Tuesday, Atlanta Fed President, Dennis Lockhart said that the U.S. economic indicators in the recent past have been uneven; accordingly it was difficult to forecast when exactly the Fed could start tapering of the quantitative easing (QE3).The remarks came just after the tepid retail sales data.  The ‘core’ consumer spending for July was below economists’ expectation.

Bullion tends to gain in an environment of accommodating monetary policy. As rampant currency printing keeps interest rates low, investors in such environment seek safety in physical assets such as gold, which does offer yields or dividends.








More Posts by this author

edliston
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.

Tags:

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.

You may also like...