Gold Prices Heading towards Clocking Weekly Decline, Silver Prices Plunge more than 1.50%

By / / Gold


Gold prices continued to head southwards and were on course to post a weekly decline as investors remained reluctant to take safe-haven bets amid growing expectation that lawmakers will reach a stop-gap budget deal, probably by Friday, which will avert a debt-default. Silver prices also fell sharply in early trading on Friday.

At last check, gold futures for December delivery fell 0.96% to $1,284.50 an ounce while spot gold was almost flat at $1.285.70 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) slipped 0.14% in premarket trading to $124.10.

Silver futures plunged 1.72% to $21.52 an ounce.

Gold prices, which hovered in a tight range of $1,300-$1330 an ounce for most part of the week, fell below $1,300 an ounce level after news emerged on Thursday that GOP leaders headed by House Speaker John Boehner will meet President Obama to negotiate over budget issues. It is believed that congressional leaders will agree to raise the Treasury’s short-term borrowing limit.

Several other factors have also heavily weighed on gold prices. While lackluster physical side demand for the metal has put pressure on prices, strengthening U.S. dollar is also keeping bullion investors in sidelines.

The dollar has been supported by growing speculation that the Federal Reserve might soon start to taper its bond purchase program. Besides, some sort of reconciliation shown by lawmakers has also lent support to the dollar.

Dwindling holdings at top gold-backed exchange traded funds have also added pressure.

A data provided by Reuters showed that holdings of the SPDR Gold Trust, the world’s leading gold backed ETF, fell 0.2% or 1.80 tons to 896.38 tons on Thursday. The fund’s holdings are now at four-year low level.








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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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