Gold Prices Down; Silver Prices also Slip
Gold prices fell on Thursday as minutes from Silver prices also slipped in early trading on Thursday.
Gold has now fallen in four out of last six sessions, as global economic slowdown and frustration over no monetary easing, impelled investors to seek safety in the dollar.
The dollar, moment after the release of Fed’s minutes, rose to a two-year high against basket of major currencies, even as euro tumbled to a two year low against the greenback.
The U.S. dollar and gold prices tend to move in opposite direction. In the current year, gold has acted more like a commodity tracking riskier assets like equities, crude oil prices rather than acting as safe haven asset.
Also, the demand for physical gold in Asia contracted significantly lately. While gold’s consumption in China and Hong Kong has fallen due to economic slowdown, India, world’s biggest gold importer is grappling with weaker Indian rupee, making imports expensive.
At last check, Spot gold inched down 0.3 percent to $1,571.86 an ounce by 0311 GMT and U.S. gold futures contract for August delivery edged down0.85% to $1,562.30
According to Wang Tao, a market analyst at Reuters, technical analysis suggests that spot gold is likely to be range-bound between $1,564 and $1,582.80.
Commenting over possible course of gold prices in short-term, ANZ in its research note wrote, “We are maintaining our near-term downside bias for gold and suggest shorting the market at $1,580, targeting $1,554, with a stop at $1,600, given waning risk appetite and implications for a stronger U.S. dollar, which are likely to keep downward pressure on gold after the recent failure to maintain a rally above $1,600.”
Meanwhile, silver futures slid 1.44%, at $26.635 an ounce, while spot silver also dropped 0.3%, at $26.98, at last check.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) fell 1.45%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is down 2.85%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is up 3.44%.
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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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