Stock Market Watch

Gold Prices Edge Lower

by ·


Gold prices edged lower in trading on Friday as the euro weakened against the U.S. dollar amid lingering concerns about Greece.

Although Greek political leaders agreed to further austerity measures and reforms to secure additional bailout funds, euro zone finance ministers want the debt-laden country to do more before approving the next round of bailout package.


Pradeep Unni, Senior Analyst at Richcomm Global Services, told Reuters on Friday that gains in the U.S. dollar and consistent disappointment from the European Union regarding Greece debt deal are curbing any gains in gold. Unni said that even if the debt deal comes out, the complications are far from over. He added with an over 26% unemployment rate in Greece, austerity means further job cuts and tax increases.

Alex Zumpfe, Trader at Heraeus Precious Metals House, told Reuters that today, the market is in risk-off mood again with stock markets weaker as well. Zumpfe said that gold is facing some selling pressure after support levels did not trigger sufficient buying interest. He added that physical buying evolved on the lows but were obviously not strong enough to support the market and technically it cannot be ruled out that further weakness might occur if the $1,710 an ounce area does not hold.

Gold slipped on Friday as the euro group Chairman Jean-Claude Juncker said Greece needs to cut another 325 million euros of spending and political assurances are needed that the plan would be implemented.

Gold prices fell even though physical gold demand from India improved. A bullion dealer in Mumbai told Reuters that demand is better than the last two days as prices have cooled off a bit.

The move from CME Group to lower trading margins also failed to lift gold prices. On Thursday, the CME Group lowered trading margins for a range of commodities contracts, including gold, silver and platinum.

In a research note, Commerzbank said that in August and September of last year, CME almost doubled the margin within just a few weeks, thereby contributing to the sharp fall in the price of gold.

Spot gold slipped 0.13% to $1,719.39 an ounce on Friday. Gold futures for delivery in April on the Comex division of the New York Mercantile Exchange slipped $15.90 to settle at $1,725.30 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) ended the day 0.52% lower at $167.14, the Market Vectors ETF Trust (NYSE: GDX) ended the day 1.38% lower at $54.49, and the iShares Gold Trust (ETF) (NYSE: IAU) ended the day 0.47% lower at $16.77.

Silver prices also fell on Friday. At last check, spot silver was down 1.33% to $33.43 an ounce.

The iShares Silver Trust (ETF) (NYSE: SLV) ended the day 1.19% lower at $32.51, the ProShares Ultra Silver (ETF) (NYSE: AGQ) ended the day 2.34% lower at $59.73, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) ended the day 2.28% higher at $10.33.

Platinum and palladium also fell on Friday. Spot platinum dropped 0.11% to $1,650.13 an ounce, while spot palladium fell 1.33% to $697.35 an ounce.

On Friday, the South African President, Jacob Zuma, said that state control or ownership of the mines in the world’s biggest platinum producer could not work.

In a research note, HSBC said that had the ANC promoted a pro-nationalization agenda, the impact on platinum group metal prices would have been very bullish as foreign investment and quite possibly professional expertise would have deserted the country, with a commensurate negative impact on production. HSBC said that as it stands, the report is still modestly bullish as higher taxes on producers are bound to curb investment and production to some degree.

 

More Posts by this author

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.


Tags:

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.

You may also like...