Gold Prices Down, Silver Prices Plunge
Gold prices edged lower during Asian trading hours on Thursday as improving global economic indicators from around the world and rally in equity markets, in the recent past, is weighing on safe haven bids. Silver prices, meanwhile, plunged in early trading on Thursday.
At around 6:30 a.m. EST, gold futures for February delivery edged down 0.53% to $1,677.80 an ounce while spot gold fell 0.43% to $1,678.20 an ounce.
On Thursday, HSBC’s preliminary purchasing manager index (PMI) showed that manufacturing activity in the world’s second largest economy expanded at a fastest pace since last two years in January, reemphasizing that Chinese economy was recovering after stagnating for most part of 2012.
Earlier in January, a data release from China’s National Bureau of Statistics showed that GDP in the fourth quarter of 2012 rose at a 7.9%, snapping the trend of slower economic growth in previous seven successive quarters.
In the U.S, as expected, the Republican dominated House of Representatives approved the extension of the debt ceiling limit through May 18th, adding more pressure on gold’s safe haven appeal. Bullion, in general, tends to gain in the environment of macroeconomic uncertainty.
Moreover, the precious metal’s consistent failure to breach the psychological $1,700 an ounce level is also prompting investors to remain in sidelines.
Meanwhile bullion investors will also keep a very close eye on the Federal Reserve’s policy rate meeting, which is scheduled for next week. Investors will expect the central bank to throw some more light on its ongoing quantitative easing measures. Fed’s 4 rounds of quantitative easing has been the key driving force behind gold’s bull runs since 2008, when property bubble burst and subsequent credit crisis forced the central bank to adopt a very loose monetary policy.
“We have the FOMC (Federal Open Market Committee) and non-farm payrolls data, which could shake this market out of its technical trading doldrums,” said a Singapore-based trader while speaking to Thomson Reuters.
Silver futures plunged 1.69% to $31.89 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 1.12%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 1.96%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was up 2.41%.
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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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