Gold Prices Settle Above $1,700; Silver Prices Rise Sharply
Gold prices edged higher on Thursday, settling above $1,700 an ounce, after European Central Bank (ECB) President Mario Draghi announced a new bond buying program to contain the euro zone debt crisis. Silver prices also rose sharply on Thursday.
The ECB President said on Thursday that the central bank will start a new and potentially unlimited bond buying program to bring down borrowing costs for struggling economies in the euro zone.
Ole Hansen, Senior Manager at Saxo Bank, told Reuters that gold is holding because the market has been given what it was hoping for, but in order for gold to move decisively higher from here, we need to see what numbers the U.S. will bring to the table. Hansen added that the longer gold stays above $1,700 an ounce, the better as it gives all the newly-established long positions a bit of confidence.
Spot gold rose 0.5% to $1,701.04 an ounce on Thursday.
In a research note, Natixis said that although gold could benefit from a strengthening of the euro versus the dollar and a general appreciation of risky assets, it would be wrong to view Draghi’s plan as a form of quantitative easing and as such it many not offer much of a boost to gold prices.
In other precious metals, silver prices also gained on Thursday. At last check, spot silver was trading 1.05% higher at $32.59 an ounce.
In late trading on Thursday, the iShares Silver Trust (ETF) (NYSE: SLV) was trading 1.25% higher at $31.66, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was trading 2.42% higher at $52.80, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was trading 2.69% lower at $45.95.
Platinum and palladium also edged higher on Thursday. At last check, spot platinum was trading 1% higher at $1,580.24 an ounce, while spot palladium was trading 0.8% higher at $645.22 an ounce.
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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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