Gold Prices Inch Up as Euro Recovers; Silver Prices Edge Higher As Well

Gold prices edged up on Thursday, ending three day losing streak as euro bounced back following a statement from euro-zone nations that they agreed on bailout payments to Greece; however sentiment still remains fragile in Europe as Spain’s banking sector struggles with inadequate liquidity. Meanwhile, silver prices have also edged higher in trading today.

Much to investors’ relief, euro-zone member nations managed to reach an agreement on Thursday which would allow Greece to receive fresh bailout payments of 5.2 billion euro, to keep the economy afloat.

Spain also started to overhaul its struggling banking sector, aimed at boosting investors’ confidence in the country. On Wednesday, Spain announced that it would take a large stake in Bankia-one of the country’s largest banks.

Following Sunday’s elections results, gold prices were hammered hard as Greece’s radical leftwing party-headed Alexis Tsipras, severely criticized the ‘fiscal pact’ agreed among euro-zone member nations. Tsipras keeps an anti-bailout stance and believes that austerity measures have hit hard the euro-zone’s peripheral economy.

Spot gold gained 0.2 percent to $1,593.41 an ounce, up from its four-month low of $1,579.30, hit in the previous session. U.S. gold stood almost flat at $1,593.60.

The Relative Strength Index (RSI) for spot gold hovered above 30. A reading below 30 suggests that metal is oversold.

After inching down 31/2 month low in preceding sessions, the euro retreated on Thursday, weighing on dollar.

Meanwhile, the physical gold demand in India remains subdued even after metal lost more than 3% since last Friday.

Commenting over weak physical gold demand, a Singapore-based trader said to CNBC-Reuters, “The physical market is relatively quiet even as prices are lower, some of which may have to do with foreign exchange — the rupee is relatively soft.”

“Some key parts of the physical market are only at a fraction of what they were last year,” he added.

Spot silver climbed up 0.2 percent to $29.28 an ounce, up from its four-month low of $28.60, hit in the previous session. The RSI reading on silver fell below 29 earlier in the day, its lowest reading in last seven months.

In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is up 0.07%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is down 0.18%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is up 1.66%.

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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.