Stock Market Watch

Gold Prices Head Southwards as Metal Fails to Breach Next Key Resistance Level; Silver Prices Also Drop

by ·


Gold prices fell sharply during Asian trading hours on Wednesday as the metal’s failure to breach its next key resistance level prompted investors to unwind positive bets, notwithstanding continued policy standoff in Washington. Silver prices have also edged lower in early trading on Wednesday.

At last check, gold futures for December delivery fell 1.00% to $1,311.40 an ounce while spot gold lost 0.55% to $1,311 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) slipped 0.62% in premarket trading to $126.61.

Silver futures dropped 1.31% to $22.15 an ounce.

During early Asian trading hours, gold prices held steady as continued impasse meant that the partial government shutdown will enter its seventh day on Wednesday.

However, the bigger threat arising due to the policy paralysis is possibility of U.S. sovereign debt default, which will be a catastrophic event for global financial markets.

Lawmakers will have to reach an agreement over the debt-ceiling issue by Oct. 17 deadline. In case, congressional leaders fail to increase the Treasury’s borrowing limit then it could result in unprecedented debt default.

“The support for gold will strengthen as we get nearer to the critical (deadline) next week,” said Song Seng Wun, an economist at CIMB, according to Reuters.

“Until the fear of U.S. government default subsides, gold will gain from safe-haven buying,” added Wun.

Still, many argue that lawmakers will prevent the default by agreeing to a stop-gap solution; which is the reason why gold prices have oscillated in the tight range of $1,300 to 1,330 an ounce in preceding five sessions, failing to cross its next key resistance level of $1,336 an ounce.

 








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...