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Gold Prices Climb Above $1,660 as U.S. Q1 GDP Falls Short of Expectations; Silver Prices Also Edge Higher

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Gold prices edged higher on Friday crossing the $1,660 an ounce level as lower than expected GDP growth in the U.S. in the fiscal first quarter weighed on dollar. Also, the Fed’s statement that it may provide further monetary stimulus in case of economy weakens, helped the metal to make further gains. Meanwhile, silver prices have also edged higher.

The precious metal has remained in a tight range for most part of the month and has failed to make spectacular gains as the physical demand from Asia, mainly India, remained sluggish due higher prices and weaker Indian rupee. Gold’s monthly price spread of $1,610-1,680 an ounce in April is its tightest since last June.


“The role of the futures investors is still dominant as physical demand is rather weak at the moment, especially from India, due to high local gold prices and tax increases. It will take some time before this is adjusted”, said Carsten Fritsch, analyst at Commerzbank.

While Spot gold advancing 0.5 percent at $1,665.09 an ounce, having touched a two-week high at $1,666.41, U.S. gold futures for June delivery were gaining $6.00 at $1,666.30, at last check.

Commenting over gold’s sharp gain, Fritsch said, “At the end of the year we expect gold to resume its uptrend, but not before that. We expect this range trading to continue.”

Meanwhile, in its note to investors, analysts at Bank of America Merrill Lynch pointed out that “Stronger US data in (the first quarter) damaged the gold market; nevertheless, we believe growth will slow down in the coming weeks. Another round of quantitative easing by the Fed should bring new buyers into the market.”

Among other precious metal markets, silver edged up 0.8 percent, trading at $31.35 an ounce.

The metal is heading towards a 1 percent slide this week, after sliding below $30 an ounce for the first time since mid-January on Wednesday.  Silver prices fell in six of the last eight weeks.

The iShares Silver Trust (ETF) (NYSE: SLV) is currently trading 0.37% higher at $32.81, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is currently trading 0.74% higher at $60.90, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently trading 0.58% lower at $10.21.

Spot platinum was gaining 0.4 percent at $1,568.74 an ounce, while its sister metal palladium was up 1 percent at $673.47.

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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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