Gold and Silver Prices Edge Lower

Gold Prices continue to fall on Friday, heading towards its lowest level in last four weeks as investors’ tread with caution ahead of all important non-farms jobs data for April, hoping any weakness in the numbers might prompt the Federal Reserve to provide some kind of quantitative easing. Meanwhile, silver prices have also edged lower.

Gold investors are expecting that if the non-farm job data turns out to weaker than expected, fed could take some monetary easing measures, weakening the dollar and boosting gold prices.

U.S. dollar and gold prices have an inverse relationship. As most commodities, including gold are traded in dollars in international markets, any weakness in the U.S. unit makes its cheaper to buy gold for those traders who deal in other currencies.

On Thursday, the ECB meeting on rate decision provided no hints on possible quantitative easing measures like bond buying even as it kept the benchmark interest rate unchanged at 1%.

At last check, U.S. gold lost 0.29%, at $1,630 an ounce.

In a note to investors, INTL FC Stone analyst Edward Meir wrote “Until all three regions (U.S., euro-zone and China) see a definitive tilt towards more easing, gold will likely remain confined in an uneventful trading range for a little while longer.”

The metal has traded on a very tight monthly spread, hovering between $1630 and $1,670 an ounce. Commenting over metal’s failure to cross the range, Lee Cheong, a gold dealer in Hong Kong, said to Reuters, “Whether or not the data is going to be bad, the market is still in a range trade. The upside is a bit limited for a little while. Nobody wants to enter the market”.

Meanwhile the sluggish physical demand for gold, especially from world’s biggest importer-India, continues to concern the market.

“We have to see physical buying coming back before gold can stabilize. Otherwise, we can test $1,625 again. We don’t know when the Indians will come back”, said Lee Cheong.

The Indian rupee hit its four mont-low against the dollar, thereby making imports more expensive. Besides, poor consumer sentiment amid economic slowdown and high rate of inflation also curtailed the demand for gold.

Silver futures are currently down 0.17% to $29.96 an ounce.

In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is down 0.82% to $29.05, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is down 1.36% to $46.40, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is up 2.10% to $12.15.

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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.