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Gold Prices Rebound Ahead of Fed’s Open Market Meeting; Silver Prices also Edge Higher

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Gold prices rebounded on Tuesday as euro gained against the dollar following successful debt sales in the Netherlands, even as news of central banks, globally increasing their gold reserves helped lifting the metal’s prices. However, trading volume still remains low as most gold investors eagerly wait for Federal Reserve’s open market committee meeting which starts today. Meanwhile, silver prices have also edged higher today.

While Spot gold was gaining 0.4 percent at $1,644.61 an ounce, U.S. gold futures were adding $13.50 an ounce at $1,646.10.


Gold has slid more than 2% this month as stronger dollar and worsening euro-zone debt crises weighed on euro.

However, on Tuesday market sentiment towards gold improved with euro rising 0.4% as Netherlands debt sales went off smoothly despite the Dutch Government Collapsed a day before.

Reacting to the rebound, Sharps Pixley Chief Executive Ross Norman said to Reuters “The story for gold is unchanged, whether you’re looking at the fundamentals, which have underpinned the market from the year 2000, or the premium on gold attached to the economic crisis”.

Meanwhile data published by International Monetary Fund showed that central banks worldwide have continued to make significant gold purchases, with Mexico increasing its holdings by 16.8 tons and Russia lifting its reserves by 16.55 tons last month. The data also showed Argentina raised its gold holdings by 7 tons in September.

In its note to investors, UBS bank wrote “The confirmation of official central buying should help gold find some stability today after a poor start to the week”.  However, the note also cautioned that investors should not read too much from central bank’s buying as market sentiment to an large extent depend on FOMC meeting. After all, Fed-speak still remain the largest determinant of gold’s direction for now,” added the note.

Among other precious metal markets, silver gained 0.9 percent at $31.08 an ounce.  Spot platinum fell 0.2 percent at $1,550.25 an ounce, while its sister metal palladium climbed up 0.7 percent at $672.47.

The iShares Silver Trust (ETF) (NYSE: SLV) is currently trading 0.30% lower at $29.88, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is currently trading 0.57% lower at $49.06, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is currently trading 0.70% higher at $11.47.

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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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