Gold Prices Extend Losses in Asian Trading Hours as Investors Prefer riskier Assets; Silver Price also Slip
Gold prices slipped during Asian trading hours on Wednesday as improving global macroeconomic indicators are spurring investors to raise exposure in riskier bets ranging from equities to commodities—away from safe haven assets such as bullion, which thus far have been outpaced by platinum group metals. Silver prices also slipped in early trading on Wednesday.
At around 7:00 a.m. EST, gold futures for February delivery fell 0.17% to $1670.60 an ounce while spot gold edged down 0.18% to $1,669.54 an ounce.
Stronger dollar also weighed on bullion prices. On Tuesday, the Japanese Yen plunged to a three year low against the greenback after the news emerged that Bank of Japan might appoint a new governor, who is known for his penchant of very accommodating monetary policies.
The news triggered buying in gold futures on the Tokyo Commodity Exchange (TOCOM), with the most active contract, currently December, climbing for the fifth consecutive day to hit a record high of 5,073 yen a gram, according to a data provided Thomson Reuters.
Nonetheless, the rest of Asia was calmer as bullion investors remain in sidelines, waiting for the European Central Bank’s policy rate statement on Thursday and wait for some more economic data to decide future course of action.
Speaking to Thomson Reuters, a dealer in Singapore said, “My office in Tokyo told me there’s buying in Japan, but it’s pretty quiet here. Gold has been trading sideways for a while.”
Andrey Kryuchenkov, strategist at VTB Capital in London, wrote in a research note, “( investors) remain unconvinced gold is capable of replicating its decade-long robust performance through to 2012 given recent improvement to global risk sentiment and rallying equity markets.”
Meanwhile platinum group metals continued to rally on Wednesday in the backdrop of improving outlook on global industrial production. While Platinum climbed to its highest level in four months on Wednesday, palladium was hovering near its highest level since September 2011.
Silver futures lost 0.63% to $31.675 an ounce.
In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was flat.