Gold Prices Steady at Around $1,580 Level, Silver Prices Fall
Gold prices flitted around $1,580 an ounce level on Friday as bullion investors keenly wait for non-farm payrolls data due to be announced later today after recent barrage of better than expected U.S. economic data weighed on metal’s safe haven appeal. Silver prices have slipped in early trading on Friday.
At last check, U.S. gold futures for April delivery added 0.15% to $1,577.50 an ounce while spot gold inched down 0.07% to $1,577.39 an ounce.
According to Wan Tao, a market analyst at Reuters, technical chart suggested that spot gold will oscillate in the range of $1,564 to $1,589 an ounce and future direction will become only clear once its breaks above or below this level.
The Labor Department is scheduled to announce its non-farm payrolls data for February at 8:30 a.m. EST. Economists polled by Reuters are expecting small improvement in the labor market. Earlier this week, both Moody’s Analytics/ADP private sector job data and Labor Department weekly claims report indicated that the U.S. labor market was improving gradually.
The Federal Reserve’s ongoing $85 billion monthly bond purchase program or QE3 is pegged to improvement in the labor market; hence any improvement or deterioration in the job-market (which is unlikely) will offer good idea over for how long the Fed might continue its economic stimulating measures.
“If the jobs data undershoots expectations, it would be positive for gold,” said Li Ning, an analyst at Shanghai CIFCO Futures, according to Thomson Reuters.
The Federal Reserve’s three round of quantitative easing since 2008 along with extremely accommodating monetary policies adopted by global central banks has been the key factor behind gold bull runs in last 4 years. Rampant currency printing stokes fears over currency debasement which in turn boosts the demand for inflation-hedge asset such as gold.
However, some market participants believe that there will be no inflationary pressure on the U.S. economy until the Federal Reserve increase the size of current bond purchase program.
Silver futures slipped 0.15% to $28.765 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.32% to $27.82, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 0.61% to $38.97.
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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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