Gold Prices Edge Higher; Silver Prices also Gain

Gold prices held mild gains during Asian trading hours on Monday as metal’s safe-haven appeal received a boost on Friday after Labor Department’s job data showed that the U.S. job market, although showing improvement, is not strong enough to press the Fed to prolong its ongoing quantitative easing (QE) measures. Silver prices also edged higher in early trading on Monday.

At around 5:30 a.m. EST; gold futures for February delivery edged up 0.34% to $1,654.30 an ounce while spot gold was almost flat at $1,654.50 an ounce.

On Friday, gold prices swung wildly in either direction.

While unresolved issues in Washington concerning spending cuts and debt ceiling together with minutes from Federal Reserve’s latest policy rate meeting, which showed many officials not in favor of massive asset purchase from the financial markets, kept pressure on prices initially pulling the metal to its 4-1/2 month low, weaker than expected labor market data, released later during the day, brought back bullion investors as expectation grew that period of rampant currency printing would not halt anytime soon.

Earlier in 2012, the Fed vowed to continue with its QE3 measures until the job market showed drastic improvement.

The metal although ended 1.5 lower for the session, it bounced back from its session’s low of $1,625 to gain 1.5 percent towards the end of the day to settle at $1,648.90 an ounce.

Speaking to Thomson Reuters, one Sydney based trader said, “There is still hope for gold. I’m much less sanguine about the state of the U.S. economy, as some of the leading indicators are suggestive of a slowdown in U.S. payrolls growth and a stalling in the drop in the unemployment rate.”

Accordingly the Fed will need to persists with its economic stimulating program which in turn boost gold’s prices as fear of currency debasement in the backdrop rampant currency printing will prompt investors to seek safety in inflation hedge assets, said the trader.

In a note, Li Ning, an analyst at Shanghai CIFCO Futures, said, “We think gold still has a chance of breaking above $1,800 and even reach $1,900 in the first half of the year due to fragile economic recovery in the United States and easing policies by central banks.”

Silver futures gained 0.61 percent to $30.13 an ounce.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.41%, and the ProShares Ultra Silver (ETF) (NYSE: AGQ) was up 0.09%.

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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