Gold Prices Edge Lower, Silver Prices Fall as well

Gold prices edged lower during Asian trading hours on Thursday as demand for safe haven bets is fading amid continuous barrage of strong U.S. economic indicators. Silver prices also edged lower.

Improving U.S. economic indicators is also boosting the U.S. dollar against a basket of major traded currencies to a multi-month high, which in turn is weighing on the demand for dollar-dominated commodities, including gold.

As commodities are priced in U.S. dollars in international market, any strength in the U.S. unit weighs on the demand since those traders who are dealing in other currencies find it more expensive to buy.

At last check, U.S. gold futures for April delivery fell 0.18% to $1,585.60 an ounce while spot gold was mainly flat at $1,587.60. Silver futures fell 0.44% to $28.83.

Gold prices, which momentarily jumped to 2 weeks high, touching intra-day high of $1,599.10 an ounce on Wednesday, following worse-than-expected industrial output data from the euro zone—pared most of its gains after the U.S retail sales data for February showed that the world’s largest economy was slowly but surely picking up the momentum—driving investors away from safe haven instruments towards riskier assets.

“We already initiated a sell gold recommendation last December. As long as the U.S economy is coming back we do not think gold prices can rise,” said Henry Liu, head of commodity research at Mirae Asset Securities in Hong Kong, according to Reuters.

Holdings in SPDR Gold Trust (ETF) (NYSE: GLD), world’s largest gold-backed ETF, remained mainly unchanged on Wednesday after falling for four successive session to touch a lowest level since October 2011 on Tuesday.

Meanwhile, bullion investors are likely to remain in sidelines, waiting for the Federal Reserve’s next policy rate meeting, scheduled to be held on March 19-20.

The Federal Reserve’s ultra-loose monetary policy has been the key factor behind gold’s bull runs in the recent past; and should the central bank decide to halt its ongoing economic stimulating measures then the yellow metal prices might come under more pressure.

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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.