Stock Market Watch

Gold Prices Edge Lower; Silver Prices Also Slip

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Gold prices slipped during Asian trading hours on Friday but were on course to post best weekly performance in last two months as Washington’s stop-gap budget deal has triggered speculation that the Federal Reserve will be now be disinclined to taper its asset purchases anytime soon due to economic uncertainty. Silver prices also slipped in early trading on Friday.

At last check, gold futures for December delivery edged down 0.42% to $1,317.40 an ounce while spot gold slipped 0.13% to $1,317.39 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) was down 0.17% in premarket trading to $127.21.

Silver futures fell 0.37% to $21.86 an ounce.

Gold prices, which plunged about 4% ever since the shutdown started, rallied more than 3% on Thursday as the dollar fell sharply against all major traded currencies, making commodities cheaper for dealers holding other currencies. On Thursday, the dollar index fell to its eight-month low.

According to Reuters, two big separate buy orders at COMEX December futures also supported the rally.

Earlier on Wednesday, a bipartisan agreement was struck in Washington, under which the Treasury is allowed to extend its borrowing authority until Feb 7 and federal agencies will receive funding until Jan. 15. Market participants are betting that ‘Kicking the can down the road’ policy will only lead to macroeconomic uncertainty, which in turn postpone the Fed’s plans of scaling down its economic stimulating measures.

Gold prices tend to benefit in the period of excessive accommodative monetary policy because lower interest rates encourage investors to take positions on 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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