Stock Market Watch

Gold and Silver Prices Retreat

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Gold prices fell during Asian trading hours on Friday as some profit booking following recent gains and technical weakness (failure to breach the key resistance of $1,300), paused the brief rally. Silver prices also edged lower in early trading on Friday.

Still, the metal is on course to post best weekly performance in almost two years.

The physical side demand for the metal also eased in Asia, said traders according to Reuters.

At last check, U.S. gold futures for August delivery fell 0.86% to $1,268.90 an ounce while spot gold plunged 1.1% $1,270.58 an ounce.

Gold tumbled about 24% in the second quarter of this year amid persistent fears that the Federal Reserve might start winding down its multi-billion dollar monthly asset purchases in the backdrop of improving U.S. macroeconomic environment. Later in the third week of June, the Fed Chairman, Ben Bernanke also laid out the pull back strategy of the bond purchase program, citing that U.S. economy was witnessing an improvement.

However, on Wednesday, while delivering a speech at the National Bureau of Economic Research, Bernanke surprised everyone by saying that the accommodating policy will continue for a foreseeable future as the labor market was not strong enough yet. The Fed minutes also showed that most policymakers were not convinced to reduce the pace of economic stimulating measures at this juncture.

The remarks immediately boosted metal’s inflation-hedge appeal even as dollar sagged against major traded currencies, making dollar-dominated commodities cheaper for traders holding other currencies.

Now, the general perception is that the Fed might push its plan to taper QE3 to the next year.

Silver futures fell 1.36% to $19.68 an ounce.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 1.59%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 3.68%.








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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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