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Gold Prices Pare Losses To Turn Near Flat; Silver Prices Edge Higher

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Gold prices pared earlier losses but hovered around 3-week low level on Wednesday as investors remained wary of taking fresh positions ahead of the crucial open market committee meeting of the Federal Reserve (FOMC). Silver prices, meanwhile, edged higher in trading on Wednesday.

The outcome of the FOMC, which is expected on September 18, might provide clear indication over when the bank might start squeezing its quantitative easing (QE3).

At last check, gold futures for December delivery slid 0.04% to $1,363.40 an ounce while spot gold slipped 0.05% to $1,362.96 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) was last slipping 0.06% to $131.66

If the Fed decides to start the tapering process from September, which majority of market participants believe is highly possible then bullion might come under more pressure. As interest rates will spike, investors will drift away from non- interest bearing assets such as gold.

The Federal Reserve’s rampant current printing and ultra-low interest rates supported the metal’s bull runs in last 12 successive years. The metal peaked at $1,920 (its historical high) in September 2011.

“The uncertainty around the timing and pace of the Fed tapering is currently putting pressure on gold prices and will continue to do so until the central bank disclose that information at its meeting next week,” said  Gianclaudio Torlizzi, a metal consultant at T-Commodity while speaking to Reuters.

According to Reuters, economists are anticipating that that the Fed will narrow its $85 billion worth bond purchase program initially by some $10 billion.

Concerns over Syria have also receded lately which in turn have weighed on the metal’s safe haven appeal. Although President Obama during his televised speech to the nation said the U.S. could still take a military action against Syria, if required, expectations are high that a diplomatic dialogue will resolve the stalemate.

Silver futures gained 0.47% to $23.13 an ounce.

In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.77% to $22.31, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 1.62%.

 








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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.

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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.

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