Stock Market Watch

Gold Prices Climb More Than 4%, Silver Prices Soar As Well

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Gold Prices soared during Asian trading hours on Thursday while U.S. dollar and yields on U.S. treasuries fell sharply after the Federal Reserve surprised global investors on Wednesday by delaying tapering of its multi-billion dollar, bond purchase program. Silver prices have also risen sharply in early trading on Thursday.

At last check, gold futures for December delivery climbed 4.58% to $1,367.50 an ounce while spot gold was trading at $1,366.75.

SPDR Gold Trust (ETF) (NYSE: GLD) edged down 0.20% to $131.90 in premarket trading.

Silver futures leaped 6.38% to $22.94 an ounce.

The Fed’s two-day open market committee ended on Wednesday. After the meeting, the Fed’s Chairman Ben Bernanke remained tight-lipped on the issue of narrowing down of economic stimulating measures, saying that it was “not on preset course”. Earlier in June, Bernanke had hinted that tapering of the quantitative easing could begin from any of the remaining three FOMC’s in 2013.

The Fed’s decision surprised the market. Investors had expected the Fed to cut its bond purchase program by $10 billion, to begin with.

Speaking to Reuters over the Fed’s decision, Dick Poon, general manager of refiner and dealer Heraeus Metals in Hong Kong said, “It’s quite surprising given what they have said before. That’s why there is a big impact on precious metals.”

“But I don’t see a strong rally as there is not much demand,” added Poon.

Ultra loose monetary policy (Record low interest rates along with rampant currency printing), keeps interest rates low as a result investors prefer non-interest bearing assets such as gold.

 

 








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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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