Stock Market Watch

Gold Futures Edge Higher; Silver Futures Also Gain

by ·


Gold futures pared initial weakness to edge higher during Asian trading hours on Wednesday as investors continued to take positions on inflation hedge bets amid expectations that the Federal Reserve might keep its accommodating monetary policy on for some more time. However, spot gold prices fell as the sentiment in China was subdued after country’s manufacturing activities fell to 11-month low in July. Silver futures also edged higher in early trading on Wednesday.

Earlier today, bullion prices slipped as investors booked profits after the metal hovered around one-month high level in previous sessions. A stronger U.S. dollar also weighed on the demand.

At last check, gold futures for August delivery gained 0.34% to $1,339.80 an ounce while spot gold fell 0.69% to 1,338.24 an ounce.

Silver futures were edged up 0.20% to $20.29 an ounce.

Bullion rallied almost 6% in last six sessions, showed a data provided by Reuters. Last week, the Federal Reserve Chairman Ben Bernanke signalled that the tapering of the bond purchase program (quantitative easing or QE3) could begin later this year, subject to macroeconomic outlook.

Bernanke’s slightly dovish remarks pacified investors. Furthermore, a very tepid housing market data on Tuesday also raised hopes that the Fed might wait little longer before its starts to taper its QE3.

Before Bernanke’s congressional testimony, the general perception was that the Fed would start winding down asset purchases from September.

Earlier this week, the metal breached $1,300 level mark, which triggered technical buying. Weakness in the U.S. dollar also supported prices.

Now, bullion investors will keep a very close eye on upcoming U.S. economic indicators, especially the job data, as scaling down of the Fed’s economic stimulating measures is explicitly tied to an improvement in the economy.

Meanwhile, the holdings of the SPDR Gold Trust (ETF) (NYSE: GLD), the world’s largest gold-backed ETF, continued to fall on Tuesday.

A data provided by Reuters showed that the fund’s holdings fell another 0.16% to 929.76 tons on Tuesday.

 








More Posts by this author

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.

Tags:

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.

You may also like...