Gold Prices Fall but Heading Towards Weekly Gains, Silver Prices Down As Well

Gold prices slipped during Asian trading hours on Friday as the U.S. dollar Index edged slightly higher; however, the yellow metal is on course to post its biggest weekly gains in more than a month, thanks mainly to European Central Bank’s (ECB) interest rate policy decision on Thursday—which refrained from any more cuts, strengthening the euro. Silver prices also edged lower in early trading on Friday.

At around 5:30 a.m. EST, gold futures for February delivery lost 0.54% to $1,668.90 and spot gold fell 0.33% to $1,669.06 an ounce.

Meanwhile in Japan, trading volume in Tokyo gold futures was very high on Friday. Japan’s new government, led by Shinzo Abe , unveiled a $117 billion economic stimulating package on Friday as the country try to break shackles of economic stagnation. World’s second largest economy is reeling  under economic contraction, and with new economic stimulating measures the country hopes to create 600,000 jobs and push inflation rate above 2 percentage point

Following the announcement from Bank of Japan, the Japanese Yen slumped to its 2 1/2 year low against the greenback while Tokyo gold futures touched a record high of f 4,820 yen a gram ($1,699.62 an ounce) as fear of currency debasement in the backdrop of rampant currency debasement, prompted investors to seek safety in gold. Also, as the metal touched its record high, funds chose to close positions and book profits.

“The record-high gold prices in yen have triggered some liquidation from Japanese customers, which is putting pressure on the market,” said Peter Fung, head of dealing at Wing Fung, Precious Metals in Hong Kong to Thomson Reuters.

Central banks extremely accommodating monetary policies have been the key factor behind gold’s bull runs in last 12 years.

In Asia, physical side demand remained strong, as China continued to make purchases before the Chinese New Year.

Silver futures s edged down 0.69% to $30.70 an ounce.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.34%.



Ed Liston is a senior contributing editor at 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.