Stock Market Watch

Gold and Silver Prices Slip

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Gold prices were falling towards $1,650 an ounce as dollar bounced back following euro-zone’s PMI data for April showed manufacturing activities performed worse than expected, heralding a possibility of recession in the second quarter. Silver prices have also edged lower in trading today.

At last check, Spot gold was down 0.5 percent at $1,653.86 an ounce, while U.S. gold futures slid $3.10 an ounce at $1,659.30


Meanwhile, comments of several fed officials showing satisfaction over monetary policy dashed any further hopes of quantitative easing thereby putting pressure on gold.

The metal has traded on a very tight monthly spread for last two months, remaining firmly in the range of $1,620 and $1,670 an ounce.

Commenting over Gold’s failure to surpass the narrow range, Pradeep Unni, analyst at Richcomm Global Services said to Reuters, “With economic data throwing mixed signals, it is most likely that gold will continue to wobble in a narrow range, at least until there is clarity on the jobs front.”

BNP Paribas has cut its forecast for both gold and silver in 2012. Bank’s revised  average gold’s price stands at $1,715 an ounce, silver average price is expected at $33.10 an ounce.

The bank said that fading expectations of any further quantitative easing led to cuts in its previous forecasts. “(Our economists’) central scenario is now for further Fed monetary accommodation to be implemented only in the fourth quarter instead of June”, wrote bank in its note.

“This change has significant implications for our gold price forecasts (and by extension for our silver price forecasts), given gold’s tight positive relation with the level of market liquidity”, the bank added.

Among some other precious metals markets, silver was sliding 1.2 percent at $30.58 an ounce.  Silver’s underperformance lifted the gold/silver ratio, which measures the number of silver ounces needed to buy an ounce of gold, to 3-1/2 month highs.

The iShares Silver Trust (ETF) (NYSE: SLV) is currently trading 1.40% lower at $29.64, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is currently trading 2.84% lower at $48.19, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently trading 2.83% higher at $11.63.

Spot platinum was also shedding 0.5 percent at $1,557.94 an ounce, while palladium was losing 0.7 percent at $670.72.

 

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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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