Gold Prices Up, Silver Prices Jump Over 2%

Gold prices rebounded during Asian trading hours on Monday as seven-month low prices, hit in the previous session, along with weakness in the U.S. dollar triggered buying interest, helping the metal to recover some of its lost ground after last week’s downfall; nevertheless, prices are likely to remain capped as investors keep an eye on the outcome of Italian elections. Silver prices, meanwhile, rose sharply in early trading on Monday.

At around 7:15 EST, gold futures for April delivery gained 1.2% to $1,591.60 an ounce while spot gold gained0.82% to $1,593.24.

“After the drop, hopefully the worst is over for gold, although the support is still at $1,527. I believe (after) a break above $1,585, you might see a trend that it should test $1,600,” said Brian Lan, managing director of GoldSilver Central Pte Ltd in Singapore, in a note to investors, according to Reuters.

Earlier on Friday, the yellow metal settled at $1,572.80 an ounce at the Comex division of the New York Mercantile Exchange, to hit its seven-month low level. The metal lost 2.4% in the previous week. Sell-off was sparked after the Federal Reserve’s minutes from the latest FOMC showed that many policymakers were concerned over the ongoing $85 billion worth monthly bond purchase program.  The Federal Reserve’s extremely loose monetary policy has been the key driver behind gold’s bull runs since last four years.

The Dollar Index edged lower on Monday while the euro rebounded from a six-week low to trade at  1.327 against the greenback, making dollar-price commodities cheaper for traders dealing in currencies other than the U.S. unit. However, any further gain for the euro is very unlikely as investors will wait for the exit polls from Italy. In case, Italy’s voters give a fractured mandate then political instability in one of the euro zone’s biggest economy could reignite concerns over the recovery of the 17-nation monetary union’s vulnerable economy and weigh on the euro which in turn could put pressure on gold.

Meanwhile in Asia, multi-month low prices spurred Jewelers and investors to capitalize. Commenting over the demand in Asia, a Hong Kong based physical gold dealer said to Thomson Reuters, “We’ve seen buying from China, and we can say it’s from the investment side and the jewellery sector. People in Asia are still buying gold.”

Silver futures leaped 2.28% to $29.11 an ounce.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 1.44% to $28.23, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 2.71% to $40.19.

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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.