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Gold Prices Down Ahead of Options Expirations; Silver Prices also Edge Lower

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Gold prices pared initial gains to turn lower in Asian trading hours on Thursday as wary investors remained in sidelines ahead of the U.S. job data. Silver prices have also edged lower in early trading on Thursday.

Gold futures also remained volatile as traders positioned themselves to book profit around a key price target before the option expirations.

At last check, gold futures for December delivery fell 0.73% to $1,309.90 an ounce while spot gold was last down 0.73% to $1,311.11 an ounce.

Earlier on Wednesday gold prices fell more than 1% after two back to back solid U.S. economic data fanned speculation that the Federal Reserve might soon start winding down its $85 billion worth monthly bond purchase program (Quantitative easing).

Both July’s manufacturing index and June’s new home sales  data showed better-than-expected readings.

The Federal Reserve’s extremely accommodating monetary policy since the credit crises of 2008/09 has been the key factor behind gold bull runs. As ultra-loose monetary policy stokes inflation concerns, investors took safety in inflation-hedge bets such as gold. In September 2011, gold touched its all-time high of $1,920 an ounce.

Meanwhile, the entire spotlight now will shift to the job data (weekly jobless claims). The Fed has explicitly tied its economic stimulating measures to an improvement in the U.S. job market.

“The housing numbers yesterday really took the wind out of gold’s rally. If the jobless claims numbers are supporting on the tapering side, that will be very bearish for gold,”” said a Hong Kong based trader while speaking to Reuters.

Silver futures fell 1.15% $19.79.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.26%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 3.91%.








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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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