Stock Market Watch

Gold Prices Gain as Dollar Retreat; Silver Prices Flat

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Gold prices edged higher during Asian trading hours on Tuesday as the U.S. dollar remained weak ahead of the Federal Reserve Chairman Ben Bernanke’s testimony to the Congress on July 17 and 18.  Silver prices, meanwhile, were flat in early trading on Tuesday.

At last check, U.S. gold futures for August delivery added 0.16% to $1,285.50 an ounce while spot gold gained 0.57% to $1,289.31 an ounce.

Typically, gold prices and the U.S. dollar tend to move in inverse direction as softer dollar makes dollar-priced commodities cheaper for dealers trading in other currencies.

Bernanke’s testimony could provide some clue over exactly when the Federal Reserve might start winding down its assets purchases program. In the previous week, Bernanke surprised global financial markets by saying that the bank would keep on its accommodating monetary policy for a foreseeable future.

Before Bernanke’s remarks, speculation was rife that the bank could start tapering its $85 billion worth monthly bond purchase program from September.

Some market analysts said that Bernanke’s dovish comments were only meant to calm down investors nerves and reduce volatility in markets. It is now expected that the Fed might eventually start scaling down the pace of economic stimulating measures by the end of this year or by the beginning of the next year.

Commenting over rising speculation on when the Fed might start reducing the bond purchase program, MKS Capital’s senior vice president Bernard sin said,   “The market is still very worried about what Bernanke is going to say this week after the mixed signals we have had in the past couple of months,” according to Reuters.

“We think he will support the tapering language in September or December, which will support a strong dollar and weigh on gold… we should be looking at $1,250 in the short term,” added Sin.

Silver futures were almost flat $19.83 an ounce.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.31% to $19.34, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 0.40%.

 








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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.

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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.

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