Stock Market Watch

Gold, Silver Prices Edge Higher

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Gold prices edged higher during Asian trading hours on Wednesday but remained below $1,300 an ounce and hovered near its two-month low level as the metal’s safe-haven appeal failed to burnish with investors believing that partial shutdown might be short-lived. Silver prices have also edged higher in early trading on Wednesday.

At last check, gold futures for December delivery edged up 0.65% to $1,294.40 an ounce while spot gold added 0.61% to $1,293.79 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) was up 0.25% in premarket trading to $124.90.

Silver futures gained 0.47% to $21.27 an ounce.

The metal plunged more than 3% on Tuesday after it broke below the key psychological support level of $1,300, triggering technical sell-off.  Large scale liquidations were also seen as investors chose to hold cash fearing macroeconomic uncertainty.

Speaking to Reuters, a Hong Kong based precious metal dealer said, “A lot of people are scratching their heads because of the aggressive selling. It was a big surprise as no one was expecting this reaction.”

Year-to-date, the metal is down about 23%.

In general, macroeconomic uncertainty tends to drive up the demand for safe-haven assets such as gold but market participants expect that lawmakers will try to find out a stop-gap solution for the budget before the next key mid-October deadline.

Another factor which is weighing on the sentiment is increasing possibility that the Federal Reserve could start winding down its gold-supportive bond purchase program before the year-end. Lately, U.S. macroeconomic indicators, especially the labor market data showed significant improvement in the economy. The current round of quantitative easing is explicitly tied to an improvement in the U.S. labor market.








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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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