Stock Market Watch

Gold and Silver Prices Gain Sharply

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Gold prices recovered from initial losses to climb more than one percent during Asian trading hours on Monday as some bargain hunting for cash gold supported the demand; nevertheless, overall sentiment remains very bearish, reflected by dwindling holdings in gold-backed ETFs. In addition, doubt over whether the metal has “bottomed-out”, is also keeping investors in sidelines. Silver prices also rose sharply in early trading on Monday.

Speaking to news reporters on Monday, Michael Haigh, managing director at Societe Generale said, “We’re predicting gold will continue to drop year after year roughly by $100 on average each year”, according to Reuters.

At last check, U.S. gold futures for August delivery climbed 1.43% to $1,230.00 an ounce while spot gold gained 0.69% to $1,231.71 an ounce.

Silver futures added 1.76% to $19.06 an ounce.

Earlier today, gold prices continued to fall as fears over early tapering of the Federal Reserve’s multi-billion dollar bond purchase program (quantitative easing), prompted investors to close positions on inflation-hedge bets. On Friday, the Labor Department’s monthly non-farm payrolls report showed that the U.S. economy added 195,000 new jobs in June compared to economists’ expectation for 165,000 new additions.

The data release immediately weighed on gold prices even as U.S. dollar climbed sharply against major traded currencies.

“The jobs report is pulling gold prices down,” said Peter Fung, head of dealing at Hong Kong’s Wing Fung Precious Metals while speaking to Reuters.

“Some physical buying interest supported prices earlier but we could test $1,200 again today,” added Fung.

SPDR Gold Trust (ETF) (NYSE: GLD), the world’s largest gold-backed ETF, reported that its holdings fell to a four-year low of 961.99 tons on Friday.

Gold, which is regarded as a hedge against inflation, has tumbled about 23% in the second quarter of this year and 10% since mid-June as investors believe that the pullback of the gold-supportive QE3 is imminent, given the fact that the U.S. economy has been showing signs of significant improvement.

 








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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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