Stock Market Watch

Gold and Silver Prices Down More Than 1%

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Gold prices fell sharply during Asian trading hours on Tuesday as investors remained disinclined towards investing in safe-haven bets after the Standard & Poor (S&P) raised its outlook on the U.S. sovereign credit to “stable” from negative, in the preceding session. Silver prices also fell sharply in trading on Tuesday.

Besides, simmering concerns over whether the Federal Reserve will or will not squeeze its economic stimulating measures amid improving macroeconomic environment is also keeping the pressure on the metal.

At last check, gold futures for August delivery plunged 1.28% to $1,368.30 an ounce while spot gold fell 1.27% to $1,368.81 an ounce. Silver futures were last down 1.69% to $21.56 an ounce.

Reacting over the S&P’s upgrade and its implication on gold prices, Brian Lan managing director of Singapore-based dealer GoldSilver Central Pte Ltd, said “The S&P news bodes well for the stock market more than precious metals,” according to Reuters.

“More funds are going towards the stock markets,” added Lan.

Investors would now keep an eye on some more economic data releases later this week. Economic indicators such as retail sales (due on Thursday), consumer sentiment (due on Friday) would provide clearer picture of the U.S. economy.

In his latest testimony to the U.S. Congress, The Fed Chairman Ben Bernanke had said that the decision to reduce the pace of the bond purchase program was possible in next few FOMCs, in case economic indicators showed significant improvement.

Meanwhile, the physical side demand in Asia is also signs of cooling off. Speaking to Reuters, one Singapore based dealer said that gold bars and coins were now easily available. Gold dealers in Asia ran out of supplies of gold coins and bars after the metal slumped to $1,320 an ounce in mid-April.

The SPDR Gold Trust (ETF) (NYSE: GLD), world’s largest gold-backed ETF said that holdings increased 0.3% to 1,009.85 tons on Monday.

 

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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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