Gold and Silver Prices Higher

Gold prices were edging towards $1,650 an ounce level as weakening dollar pushed up the demand for the metal.  The dollar fell to its three week low against the euro as Federal Reserve continued keeping interest rate at near zero levels, while falling concerns over euro-zone debt crises strengthened the euro.

While spot gold edged up 0.3 percent at $1,648.84 an ounce earlier Thursday, U.S. gold futures for June delivery climbed up $7.60 an ounce at $1,649.90.

After two days of meeting, the Federal Reserve in its policy statement said that it expects to keep the interest rate at near zero levels until 2014; but do not foresee any action on its monetary policy. However, the central bank also assured that if the U.S. economic condition weakens, it may consider providing another round of quantitative easing (QE3).

Gold investors who had been hoping for some quantitative easing from the fed were disappointed even as metal touched $1,625 an ounce level on Wednesday.

However, the weakness in dollar, and price sensitive buying quickly reversed the earlier loses.

Commenting over gold’s rebound on Wednesday, Tom Kendall, an analyst at Credit Suisse said to Reuters, “The message out of the Fed didn’t really change much”.

Meanwhile, the physical gold market continues to remain sluggish. In its note to investors, UBS wrote “The physical demand story has been very uninspiring. Combined volumes on the Shanghai Gold Exchange have been fairly decent of late… but this does little to compensate for the disappointing appetite from India.”

Among some other precious metals markets, silver gained 0.3 percent at $30.77 an ounce.

In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is up 0.27% to $29.94, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is up 0.51% to $49.22, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is flat at $11.50.

The gold/silver ratio- a gauge which measures the number of silver ounces needed to buy an ounce of gold, climbed  to a three-month high at 53.6 on Wednesday.

Spot platinum climbed up 0.7 percent at $1,556.49 an ounce, while spot palladium also edged up 0.7 percent at $662.25 an ounce.

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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.