Gold Prices Settle Higher; Silver Prices Also Gain
Gold prices settled higher on Friday, logging gains for a second straight week as the U.S. dollar eased after the Federal Reserve Chairman, in his latest bi-annual testimony before the congress reiterated the bank’s commitment towards accommodative monetary policy. Silver prices also edged higher in trading on Friday.
Gold futures for August delivery gained 0.7% or $8.70 to settle at $1,292.90 an ounce while spot gold was last up 0.72% to $1,293.80 an ounce.
Gold futures gained 1.2% for the week.
Earlier this week Bernanke said that although tapering of economic stimulating measures (quantitative easing) was expected later this year, there was no ‘preset course’. In addition, the Fed Chairman also signaled that the period of low interest rates will also stay for an extended period of time as the U.S. economy shows gradual recovery.
Before Bernanke’s testimony, speculation was widespread that the Fed could start reducing the pace of bond purchase program by September.
“Bernanke told the Senate Banking Committee yesterday it was ‘way too early to make any judgment’ as to whether tapering will start in September,” said Afshin Nabavi, head of trading at MKS in Switzerland, according to Reuters.
“I take that as positive for gold,” added Nabavi.
Bernanke’s slightly dovish comments also kept lid on bond yields which prompted investors to look towards no interest bearing assets such as gold.
The dollar Index also eased which helped pushing up the demand for dollar-priced commodities.
A data provided Reuters showed that holdings of the SPDR Gold Trust fell almost 1 tons on Thursday to 935.17 tons, which is lowest level since early 2009. For the week, the outflows were 3.9 tons compared 22.9 tons, in the previous week, according to Reuters.
Silver futures were last up 0.34% to $19.45 an ounce.
In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 0.59%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 1.33%.
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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. |