Gold Prices fell on Friday as better than expected U.S. labor market data in the preceding session hinted that the jobs report for June, slated to be released today, will be a strong one, dashing the expectations of further monetary easing from the Fed. Meanwhile, silver prices are also lower in trading today.
Meanwhile, gold prices were also weighed by falling euro following a statement from ECB President Mario Draghi on Thursday where he said that euro zone?s economy remains vulnerable. Last week, EU leaders approved series of measures aimed at stimulating monetary union?s economy, including recapitalization of banks directly from area?s rescue fund instead of adding onto government debts.
Nevertheless, after initial euphoria, market sentiment on euro zone still remains gloomy. The?dollar index?climbed up more than 1 percent ? its biggest intraday rise in almost eight months ? in the previous session, even as the euro hit near five-week lows against the U.S. dollar.
As most commodities, including gold are traded in U.S. dollars in international market, a gain in the U.S. unit lessens the demand for gold as it becomes expensive to buy for those dealers who deal in currencies other than U.S. dollar which in turn weighs on gold?s prices.
Furthermore, a series of rate cuts from three central banks (China, U.K., Euro Zone?s) on Thursday also failed to excite the bullion investors as they expected much aggressive policy response.
At last check, U.S. gold futures for August delivery lost 1.07%, at $1,592.20 an ounce.
According to Wang Tao, a technical analyst for Reuters, gold prices could fall as low as $1,586 an ounce level.
In the physical side, market remained muted as buyers avoided buying no sooner metal crossed $1600 an ounce while sellers looked for $1620 price range.
Commenting over this matter, Peter Tse, ??director at ScotiaMocatta in Hong Kong, said to Reuters, ?The current price level isn?t attractive enough to lure buyers back?. And they (jewelers) are likely to enter the market if prices drop to $1,550-$1,560.?
Silver futures also dropped 1.13%, at $27.36 an ounce, at last check.
In pre-market trading in New York, the iShares Silver Trust (ETF) (NYSE: SLV) is down 0.82%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) is down 1.78%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) is up 1.79%.
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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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