Gold Prices Inch Lower, Silver Prices Gain
Gold prices inched lower during Asian trading hours on Wednesday but continued to hover around a 2-½ week high level, hit in the previous session as Cypriot Parliament’s rejection of the EU proposal, which asked for taxing depositors, has fanned fears of sovereign debt default, boosting demand for safe haven bets. Silver prices, meanwhile, edged higher in early trading on Wednesday.
Demand for spot gold remained weak in Asia as traders remained in sidelines, waiting for the prices to drop while speculators were also selling it book profits, capping gains.
At last check, gold futures for April delivery inched down 0.07% to $1,610.20 an ounce while spot gold edged down 0.11% to $1,611.20 an ounce.
Earlier on Tuesday, Cypriot Parliament, in-line with expectation, disapproved euro zone finance ministers’ call to tax bank deposits in lieu of financial aid package of euro 10 billion ($12.9 billion).
The euro zone crisis, which looked abated amid stabilizing financial markets and gradually improving economic indicators, is now once again threatening the stability of the 17-nation monetary union.
Fears over possible debt default is prompting investors to seek safety in gold, a metal traditionally considered as safe haven instrument in an environment of economic uncertainty.
However, markets analysts are not that perturbed, citing that Cyprus debt crisis is minuscule compared to one which involved Greece and other peripheral economies of the Europe.
In a research note to clients, Ed Meir, an analyst at INTL FCstone said, “Given the relatively small sum involved compared to the previous debt financing schemes that were put together for the Greeks and others, Cyprus is a manageable problem and one that we think will eventually get resolved.”
Silver futures gained 0.25% to $28.915 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.07%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 0.41%.
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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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