Stock Market Watch

Gold and Silver Prices Tumble as Dollar Strengthens

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Gold and silver prices are sinking in trading today as the dollar continues to strengthen. The dollar is gaining after the Federal Reserve, on Tuesday, did not on further monetary easing and offered a brighter outlook for the U.S. economy.

At last check, spot gold was trading 1.5% lower at $1,649.56 an ounce. Gold futures for delivery in April on the Comex division of the New York Mercantile Exchange are currently trading 2.76% lower at $1,647.40 an ounce.


Ole Hansen, Senior Manager at Saxo Bank, told Reuters that we saw the 10-year U.S. government bond yield breaking out of the holding pattern it has been trading in for the last five or six months and that is one of the precursors to a change in rate sentiment. Hansen said that knowing how dovish the Fed- especially Bernanke- is, for him to say we are seeing growth is surprising. Hansen added that removal of quantitative easing and a higher rates forecast is not good for gold in the near term.

Walter de Wet, analyst at Standard Bank, meanwhile, told Reuters that as far as real interest rates are concerned, they will remain low for some time to come. De Wet said that at the same time, economic conditions may indicate that the Fed funds rate is too low and such a mismatch has in the past proved bullish for gold.

Silver prices are also down sharply in trading today. At last check, spot silver was trading 2.64% lower at $32.69 an ounce.

The iShares Silver Trust (ETF) (NYSE: SLV) is currently trading 3.13% lower at $31.25, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is currently trading 6.18% lower at $54.23, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently trading 6.14% higher at $10.72.

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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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