Gold Prices Flat as Investors Remain Cautious, Silver Prices also Flat
Gold prices remained almost flat on Wednesday as profit booking and persistent doubt on whether monetary easing from central banks will help shoring up the global economy put a lid on gold’s bullish run –which was sparked off last week after the announcement of QE3; however, the metal is still hovering around its seven month high. Silver prices are also flat in early trading on Wednesday.
Earlier on Tuesday most commodities’ and crude oil futures fell sharply as looming concerns over U.S. economy, growing ambiguity over Span’s stance on full-fledged bailout and simmering tensions between Japan and China dented the market sentiment.
With global economy still not showing any signs of improvement, bullion investors are little edgy as tumbling oil prices will in turn dilute gold’s inflation-hedge appeal.
Moreover, the fact that gold in recent times traded in “overbought” territory could also prompt some correction. Just after the Fed announced its next round of quantitative on September 13, gold’s Relative Strength Index (RSI) climbed above 80; and, any reading over 70 is deemed as the metal is overbought.
Commenting over the gold’s halt in the rally and its possible key resistance level, Natalie Robertson, a commodities analyst at ANZ, said to Reuters, “On the chart as well, gold prices look oversold, and it could be vulnerable to some profit-taking. Apparently, there’s high resistance at around the $1,800 level.”
U.S. gold futures for December contract remained mostly unchanged at $1,771.90 an ounce while spot gold inched up 0,06%, to $1772.70 an ounce, having earlier touched $1,766.39, a tad lower than its seven month high of $1,777.51 touched on Friday.
Meanwhile, platinum prices gained on Wednesday after tumbling for more than 2% on Tuesday. On Tuesday, world’s third biggest platinum producer, Lonmin announced that production will soon commence in Marikana mine in South Africa as wages related issues have been negotiated with miners. At last check, platinum added 0.68% to $1,628.40, weighing on metal’s price.
Silver was also flat, trading at $34.715.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 1.10%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was inactive, and ProShares UltraShort Silver (ETF) (NYSE: ZSL) was inactive.
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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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