Stock Market Watch

Gold Prices Gain; Silver Prices Edge Lower

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Gold prices continue to hover around two-week highs as metal’s safe haven appeal got burnished from falling dollar and downbeat sentiment caused by weaker than expected U.S. GDP growth in the first quarter. Meanwhile, silver prices are down in early trading.

Spot gold gained $1.12 to $1,663.44 an ounce by 0301 GMT, However, the metal was heading for its third monthly decline. Earlier, the yellow metal had risen to $1,667.11 on Friday, its highest level since April 13, on disappointing U.S. growth and European debt concerns.


Meanwhile, U.S. gold for June was little changed at $1,664.50 an ounce, at last check.

Gold investors are now expecting that Fed might provide another round of quantitative easing, aimed at boosting U.S. economy after last week’s economic indicators showed that the U.S. economy lost some momentum in the first quarter of 2012.

However, some analysts don’t agree that Federal Reserve will be in a hurry to provide monetary stimulus and call for some caution before betting heavily into gold.

For instance, one physical gold dealer in Hong Kong said to Reuters “We don’t know whether there will be QE3, so we have to wait for more economic data to come out. If the economic performance continues to be good, then there will be a diminishing prospect for QE.”

Similarly, Dominic Schnider, head of commodity research at UBS Wealth Management in Singapore also believes that it is too early to think about bullion rally. “In the short run, you can have one or two weeks for the market to get excited about QE. It’s fair enough. I am still going to call for a lower gold price,” said Schnider to Reuters.

The physical gold market continues to send jitters among investors. As India grapples with a high rate of inflation, weakening of Indian rupee, and worsening trade deficit, the demand for gold is nowhere near its normal.   Traders in India hit by a huge stock pile and high domestic prices avoided buying gold despite the peak of the wedding season.

Silver edged lower 0.5%, trading at $31.19 an ounce at last check.

In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is down 0.46% to $30.23, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is down 1.66% to $49.90, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is up 1.08% to $11.20.

 

 

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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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