Gold Prices Ease Ahead of ECB Meeting, Silver Prices also Slip
Gold prices slipped slightly on Wednesday as edgy investors remained in sidelines ahead of the European Central Bank (ECB) meeting on Thursday even as spotlight would remain on U.S. nonfarm payrolls report for August, scheduled to be released on Friday.
Earlier on Tuesday, the yellow metal hit its five and a half month high as weaker-than-expected U.S. economic indicators raised hopes that fed will provide QE3 in order to boost slowing U.S. economy.
Spot gold inched lower 0.1 percent to trade at $1,692.34 an ounce at last check while U.S. gold slipped 0.11% to $1,692.80 an ounce.
After the Federal Reserve Chairman Ben Bernanke hinted over the possibility of additional monetary easing in recently concluded annual symposium at Jackson Hole Wyoming, the ECB will be under immense pressure to act boldly when it meets on Thursday. ECB’s President Mario Draghi has already hinted that central bank will resume bond purchase program in order to bring down soaring borrowing costs of struggling member countries.
Bullion Investors, though, will keep a closer eye on the job data for August as any weakness in it might push the fed to take some urgent actions when it will meet later this month for its next FOMC.
Bullion prices, for most part of the year, has mainly reacted to the policy implemented by the fed with regard to quantitative easing. Earlier in January the metal gained 15% when the fed hinted at another round of QE but it retreated gradually as the central bank adopted less dovish policy in the wake of mixed economic indicators.
Meanwhile, holdings in gold-backed ETF have continued to soar in September after strong performance in August.
A data provided by Reuters showed that holdings in SPDR Gold Trust (ETF) (NYSE: GLD), world’s largest gold-backed ETF, rose to 1,293.138 tons, a highest level since mid-March.
Silver futures also edged down 0.79%, to $32.155 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.67%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 0.68%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was up 0.40%.
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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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