Stock Market Watch

Gold Prices Edge Lower; Silver Prices Down Sharply

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Gold prices edged down during Asian trading hours on Monday as investors paused to take fresh bets on the metal, waiting for some more economic data releases to gauge the state of the health of U.S. economy, which in turn will be provide clearer clue over when exactly the Federal Reserve could start tapering its quantitative easing. Silver prices have also fallen in early trading on Monday.

At last check, gold futures slipped 0.15% to $1,308.50 an ounce while spot gold edged down 0.34% to $1,306.99 an ounce.

Silver futures plunged 1.04% to $19.70 an ounce.

The greenback came under pressure on Friday while bullion price gained sharply after the Labor Department’s monthly non-farm payrolls report showed unexpectedly weak numbers.

Only 162,000 new payrolls were added compared to analysts’ expectation for 184,000. The weak job data fanned speculation that the Fed might not pullback its economic stimulating measures (quantitative easing) in the immediate future.

Last week, a series of better-than-expected U.S. economic data releases fanned speculation that the bank could soon start (as early as September) to squeeze its multi-billion dollar bond purchase program.

Bullion tends to gain in the backdrop of accommodating monetary policy as lower interest rates encourage investors to seek safety in the metal, which does not provide any interest.

However, some strategists like Robin Bhar, an analyst at Societe Generale,  are not convinced that the Fed will extend its QE3 for an extended period of time.

In a note to investors, Bhar wrote, “It is positive that gold is holding above $1,300 and obviously the dollar is still relatively weak on the broad dollar index, but I wouldn’t be so convinced by the rally unless some of the U.S. data comes in weak,” according to Reuters.

Meanwhile the holdings of the SPDR Gold Trust (ETF) (NYSE: GLD), the world’s largest gold-backed ETF, fell 0.26% to 918.64 tons, on Friday, showed a data provided by Reuters.

 








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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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