Gold Prices Fall Sharply; Silver Prices also Tumble
Gold prices fell sharply in trading on Thursday amid selling from funds. The precious metal also came under selling pressure from concerns over the fiscal cliff issue. Silver prices also fell sharply on Thursday.
The precious metals slipped even as the interest rates near zero as long as the unemployment rate remains above 6.5%. Although the Fed’s accommodative monetary policy is a positive for gold, the precious metal fell on concerns that a significant improvement in the labor market in the near term will prevent the Fed from pumping money into the economy.
Speaking to Reuters, Philip Strebile, senior commodities broker at futures brokerage R.J. O’Brien, said that with the economy showing some signs of recovery, we may see a 6.5% unemployment rate sooner than previously anticipated, so longer-dated funds that are heavily invested in metals are looking to reduce their gold positions.
Spot gold fell 1% to around $1,695 an ounce on Thursday. Gold futures for delivery in February on the Comex division of the New York Mercantile Exchange settled $21.10 lower at $1,696.80 an ounce.
Silver prices also tumbled on Thursday. At last check, spot silver was down 3.4% to $32 an ounce.
The iShares Silver Trust (ETF) (NYSE: SLV) ended the day 2.59% lower at $31.53, the ProShares Ultra Silver (ETF) (NYSE: AGQ) ended the day 5.05% lower at $51.10, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) ended the day 5.48% higher at $43.88.
Platinum and palladium also edged lower. At last check, spot platinum was down 1.4% to around $1,610 an ounce, while spot palladium was down 0.8% to around $686 an ounce.
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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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