Stock Market Watch

Gold Prices Hammered Again; Silver Prices also Tumble

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Gold prices were hammered for second successive day on Wednesday after unexpectedly dud U.S. economic data triggered broader-assets-sell off. Silver Prices also fell sharply on Wednesday.

While all leading benchmark indexes were sharply lower by afternoon trading, crude oil futures also tumbled more than 2%. Equities in Europe also ended lower as market participants remained in sidelines ahead of the European Central Bank’s (ECB) policy rate statement on Thursday.

At last check, U.S. gold futures for June delivery tumbled 1.41% to $1,553.60 an ounce while spot gold slumped 1.41% to $1,553.09 an ounce. On Tuesday gold fell 1.4%, biggest one-day slide since Feb 20, according to Reuters. At last check, the SPDR Gold Trust (ETF) (NYSE: GLD) was down 1.21% to $150.59.

Earlier today, a data provided by the Automatic Data Processing (ADP) showed that the U.S. private sector added 158,000 new jobs in March, way below economists’ forecast for 200,000 new job additions.

Adding to woes was the Institute of Supply Management’s (ISM) data on non-manufacturing activities which showed services expanded at its slowest pace in last seven months in March.

The weaker-than-expected data dented the U.S. dollar but it failed to lift the demand for the safe-haven bets. Since most commodities, including gold are dollar-dominated, any weakness in the U.S. unit, in general tends to push the demand for commodities as they become cheaper for traders dealing in currencies other than the greenback.

Analysts at Swiss bank fear more freefall of gold prices. In a note to clients, Swiss Bank said, “With the trending and momentum indicators pointing lower, a break below these would extend weakness to test strong support at 1,526.97, the May 2012 low,” according to Reuters.

Meanwhile Credit Suisse has slashed its average price outlook on gold for year 2013. The bank lowered its price outlook to $1,580 an ounce from initial forecast of $1,740 an ounce.

Silver futures dropped 1.39% to $26.87 an ounce.

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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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