Stock Market Watch

Gold Prices Below $1,350, Silver Prices Also Plunge About 2%

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Gold prices nosedived during Asian trading hours on Thursday as safe haven bets felt more pressure amid rising possibility that diplomatic dialogue between international community and Syria could avert military conflict.

In addition, speculation that the Federal Reserve, which is expected to announce the outcome of its policy rate meeting on Sept 18, might signal a start of tapering of the quantitative easing, is also keeping investors wary of taking any fresh positions.

At last check, gold futures for December delivery plunged 1.59% to $1,342.10 an ounce while spot gold tumbled 1.68% to $1,343.21 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) tumbled 1.61% in premarket trading to $129.58.

Silver futures lost 2.12% to $22.68 an ounce.

“It looks like with the politicians taking a much more measured approach to the problem in the Middle East, gold has lost its shine again,” said CIMB regional economist Song Seng Wun while speaking to Reuters.

“In the absence of any other development, people are taking some money off the table again” added Wun.

However, wun added inflationary pressure which is creeping back in the recent past might support the metal’s inflation-hedge appeal.

Gold, which clocked bull runs in last 12 successive years, has plunged about 18% to date since the beginning of the year amid speculation that the Fed will start squeezing its economic stimulating measures by the second half of 2013.

In a note to investors, ANZ said in its report, “We expect that with the FOMC meeting looming on the horizon, gold will trade quietly for the next few sessions, with the resultant moves in the U.S. dollar and Treasury yields to drive gold directionally,” according to Reuters.

 








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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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