Stock Market Watch

Gold and Silver Prices Ease, Fed’s Policy Rate Announcement Eyed

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Gold prices pared earlier gains to turn lower on Tuesday as investors remained wary to take bets on non-interest bearing assets amid strong possibility that the Silver prices also slipped in trading on Tuesday.

At last check, gold futures for December delivery fell 0.60% to $1,309.90 an ounce while spot gold edged down 0.31% to $1,309.26 an ounce.

SPDR Gold Trust (ETF) (NYSE: GLD) was almost flat at $126.50.

Bullion, which is down about 20% since the beginning of the year, has been hit hard due to several factors.

While speculation that the Fed will reduce the pace of bond purchases kept pressure on prices, improving global macroeconomic environment and lack of inflationary pressure has also hurt the metal’s both safe-haven and inflation hedge appeal.

Earlier today, the National Association of Home Builders’ survey showed that the business sentiment among homebuilders was at a multi-year high.

The Fed is likely to narrow the bond purchase program by $10 billion to $15 billion.

“You could potentially have a little bit of rallying if tapering comes in below expectations but in the longer-term you’d sell the rally as the Fed starts tightening its stimulus,” said  BofA Merrill Lynch analyst Michael Widmer, according to Reuters,

The dollar Index eased on Tuesday but it failed to encourage investors. Normally, the U.S. dollar and gold prices move in opposite directions. As commodities are traded in U.S. dollars in the international market, any weakness in the U.S. unit tends to boost the demand for these goods.

Silver futures lost 1.02% to $21.79 an ounce.

In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.36% to $21.01, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 0.74% to $20.47.

 








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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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