Gold and Silver Prices Slip
Gold prices slipped sharply on Friday, on course to touch its worst weekly plunge since March as concerns over euro-zone resurfaced yet again after relative calmness yesterday weighing on euro, equities and threatening monetary union’s financial stability. Silver prices have also edged lower in trading today.
At last check, Spot gold lost $6.72 an ounce to $1,587.01 by 0257 GMT after shares. Spot gold slid $8.20 to $1,587.30 an ounce, having momentarily climbed above $1,600 an ounce level on Thursday.
Commenting over gold’s sudden U-turn on Friday, Lynette Tan, an analyst with Phillip Futures in Singapore, said to CNBC-Reuters, “We are still uncertain about what’s happening out of the euro zone. For now, I think gold will trade largely like a risk asset and probably tracking equities as well. Support level is about $1,500.”
“The increase we saw yesterday was a bit of bargain hunting from a three-day of losing streak,” added Tan.
Gold- traditionally considered as safe haven asset-has bear the brunt of large sell-offs in equities, oil, precious metal and currencies markets as investors were prompted to sell bullion to cover losses from other markets.
Even though it looked like euro-zone crisis will be abated following the announcement of fresh bailout package for Greece on Thursday, along with some consensus developing among political parties in Greece to form a coalition government, market sentiment received another jolt when EU’s paymaster, Germany made it clear that Greece will have to strictly adhere to international bailout measures.
The statement is interpreted by many as a firm warning to Greece, failing of which might result in ouster of Greece from the union.
Reflecting over the crisis in euro-zone, one Hong Kong based dealer said to Reuters, “There’s a small amount of selling of gold after we failed to stay above $1,600 last night. Gold is heading south for the time being. The economy in the euro zone is very bad, and people are rushing to buy the U.S. dollar.”
“Let’s see if gold eventually breaks $1,580”, he added.
Meanwhile, silver lost 1.84% from its previous close, trading at $28.64 an ounce.
In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is down 1.27% to $27.89, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is down 2.41% to $42.55, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is up 2.85% to $65.67.
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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. |