Stock Market Watch

Gold, Silver Prices Nosedive as Lawmakers Make Significant Progress over Budget Talks

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Gold prices plunged more than 1.5% during Asian trading hours on Tuesday while global equities rallied amid rising expectation that lawmakers in Washington will soon reach a deal over spending and debt-ceiling limit, bringing an end to a nationwide government shutdown and averting unprecedented debt default. Silver prices also plunged in early trading on Tuesday.

At last check, gold futures for December delivery plunged 1.61% to $1,256 an ounce while spot gold was down 1.02% to $1,259.81 an ounce.

The SPDR Gold Trust (ETF) (NYSE: GLD) lost 0.90% in premarket trading to $121.76.

Silver futures tumbled 3.25% to $20.66 an ounce.

Lawmakers made significant progress over budget talks on Monday. After the conclusion of the meeting on Monday, Senator Harry Reid, a Democrat said that he had made a “tremendous progress” during his meeting with counterpart Mitch McConnell, a Republican, adding that the deal could be reached as soon as Tuesday.

Falling holdings at the world’s top gold-backed ETF, the SPDR Gold Trust, is also knocking down investors’ faith on gold.

The trust reported further outflows of 1.8 tons on Monday. Holdings at the trust are now at 4 ½ year low level, according to Reuters. Last week, the SPDR Gold Trust saw biggest weekly outflow (just over 9 tons), in last three months.

In a note to investors, MKS Capital said, “Investors are becoming increasingly worried about gold’s long-term stance as an investment product, whilst U.S. equities continue to remain near all-time highs,” according to Reuters.

 








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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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