Gold Futures Edge Up, Silver Prices Gain

Gold futures pared initial weakness to turn slightly higher during Asian trading hours on Friday; however, trading is likely to remain choppy as investors remain clueless over when the Federal Reserve would start winding down its bond purchase program. Spot gold however traded down as demand from China and India is showing cooling off. Silver prices, meanwhile, edged higher in early trading on Friday.

At last check, gold futures for August delivery fell 0.15% to $1,379.80 an ounce while spot gold fell 0.42% to $1,379.66 an ounce.

Silver futures gained 0.45% to $21.68 an ounce.

Gold futures fell 1% on Thursday following the release of two stronger than expected U.S. economic data releases.

While the Labor Department’s weekly jobless claims fell to 334,000 from 346,000 in the previous week, retail sales rose 0.6% in May, topping analysts’ forecast for 0.3%.

The unexpectedly strong economic data release stoked speculation that the Fed might soon start pulling back its multi-billion dollar bond purchase program.

The metal has been under constant pressure ever since the Fed’s Chairman, Ben Bernanke said that the central bank could start scaling down its monetary easing measures (QE3) in coming months, should the U.S. job and housing markets continue to show improvement.

The Federal Reserve is expected to hold its next Federal Open Market Committee meeting (FOMC) on June 18-19.

Still, market analysts are divided over whether the Fed would start decelerating the pace of economic stimulating measures at this juncture or wait for some time.

“With unemployment rates still high, I don’t think they will remove the easing that soon, maybe next year,” said Brian Lan, managing director of Singapore-based dealer GoldSilver Central, according to Reuters.

A data provided by Reuters showed that the holdings of the SPDR Gold Trust (ETF) (NYSE: GLD), world’s largest gold-backed ETF, dropped 0.63 percent to 1,003.53 tons on Thursday.

 

edliston

edliston

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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