Stock Market Watch

Gold Prices Settle Lower; Silver Prices Also Slip

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Gold prices pared initial gains to settle marginally lower on Thursday as spate of stronger than expected U.S. economic data releases in previous two sessions along with dovish forward looking guidance from the European Central Bank’s (ECB) President Mario Draghi, boosted the U.S. dollar. Silver prices also edged lower in trading on Thursday.

Market participants will now closely pay attention to the Labor Department’s monthly non-farm payrolls report. The data is due on Friday. If the job numbers suggest significant improvement in the labor market then the Federal Reserve might soon start the winding down of the bond purchase program which in turn will prompt investors to cut positions on inflation-hedge bets.

Gold futures for delivery in December fell $1.80 to settle at $1,311.20 an ounce, while spot gold prices were last down 0.9% to $1,310 an ounce. In late trading, the SPDR Gold Trust (ETF) (NYSE: GLD) was down 1.11% to $126.54.

Silver prices were last trading 0.8% lower at $19.64 an ounce.

Earlier today gold prices were supported by a weaker dollar, which fell to its six week low against major traded currencies after the Fed Chairman Ben Bernanke said that quantitative easing ($ 85 billion worth monthly bond purchase program) will continue for the time being.

However, the dollar bounced back after the ECB President reaffirmed the bank’s commitment to keep interest rate at record low level for an “extended period of time.”

Earlier today, the Labor Department’s weekly jobless report showed that first time claims fell to its lowest level in last five and half years while the Institute of Supply Management’s (ISM) PMI data showed that manufacturing activities rose sharply in July.

As commodities are traded in U.S. dollars in international market, any strength in the U.S. unit pulls back the demand for these goods as dealers trading in other currencies find them more expensive.

 








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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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