Gold Prices Lower Ahead of Fed Decision; Silver Prices also in Red
Gold prices have edged lower in trading today as investors remain cautious ahead of Federal Reserve’s monetary policy statement. Investors are hoping that the Fed would implement fresh measures to boost the U.S. economy. Meanwhile, silver prices are also down sharply in trading currently.
Hopes of further monetary easing from the Fed have been raised following some tepid economic data. Analysts say that the Fed is most likely to extend its Operation Twist program, which ends this month.
Ahead of the Fed decision, spot gold prices are down 0.74% to $1,604.66 an ounce. Gold futures for delivery in August on the Comex division of the New York Mercantile Exchange are down 1.18% to $1,604 an ounce.
Speaking to Reuters, Pradeep Unni of Richcomm Global Services, said that gold is steady and awaiting the Fed. Unni said that chances of direct QE-3 are slight but markets seems to be expecting a repeat of September 2011’s Operation Twist at the end of the Fed meeting.
A poll of 49 economists conducted by Reuters showed a 45% change that the Fed would eventually undertake another round of stimulus.
In a research note, HSBC said that if the FOMC were to decline further easing this could undermine gold but even of bullion should drop, the price will hold above $1,600 an ounce.
Commerzbank said in a note that gold is still rangebound within the confines of its major 1532.20/1522.48 support zone and the 1641 current June peak.
In other precious metals, silver prices have slipped in trading today. At last check, spot silver was down 0.85% to $28.14 an ounce.
In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is down 1.16% to $27.32, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is down 2.21% and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is up 2.21%.
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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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