Gold Prices Fall Sharply; Silver Prices Also Tumble
Gold prices nosedived on Friday and entered in a bear territory for the first time in last 12 years as the release of three back-to-back dismal U.S. economic indicators rattled investors, triggering sell-off across the board with investors seeking safety in the U.S. dollar. Silver prices also tumbled in trading on Friday.
At last check, U.S. gold futures for June delivery tumbled 3.99% to $1,502.440 an ounce, having touched an intra-day low of $1,491.40 an ounce. Spot gold plunged 3.67% to $1,503.45 an ounce.
The metal was on course to post a weekly loss of about 5.30%, a biggest weekly decline since December 2011, according to a data provided by Reuters.
Having touched an all-time high of $1,920 on September 6, 2011, the yellow metal is now down more than 20% from its historic high.
Earlier today a data release from the Commerce Department showed that retail sales contracted more-than-expected. Separately, Labor Department’s producer Price Index for March fell 0.6% against economists’ expectation of 0.1% decline. In addition, the University of Michigan’s consumer sentiment index slumped to 9 month low in April.
Commenting over the sharp drop in bullion prices, Societe Generale analyst Robin Bhar said, “The scale of the decline has been absolutely breathtaking. We tried to rally and that just didn’t get anywhere… there hasn’t been any downside support, it’s like a knife through butter,” according to Reuters.
Meanwhile, Commerbank said in a weekly technical report that gold breaking below $1,500 an ounce level was “medium term bearish”, adding that it expects its 200 day moving average at $1,434.15 an ounce.
Outflows from gold backed exchange traded funds continued on Thursday. A data provided by Reuters showed that holdings of SPDR Gold Trust (ETF) (NYSE: GLD), world’s largest gold-backed exchange traded fund, dropped by 2.1 tons or 67,710 ounces on Thursday following 17 tons of outflow in the previous session.
Silver futures slumped 4.99% to $26.315 an ounce.
In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 4.70%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 9.30%.
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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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