Gold Prices Settle Sharply Higher; Silver Prices Also Rise Sharply


Gold prices settled sharply higher on Monday as broadly lower U.S. dollar boosted the demand for dollar-priced commodities even as stronger physical side demand in Asia, driven by recent dips, helped the metal to extend gains. Silver prices also rose sharply in trading on Monday.

U.S. gold futures for August delivery climbed $22.20, or 1.8% to settle at $1,234.90 an ounce while spot gold was last up 1.13% to $1,237.10 an ounce.

The U.S. dollar Index, which climbed to its 3 year high during Asian trading hours on Monday, eased after investors chose to close positions and book profits. The U.S. dollar traded sharply higher after the Labor Department’s non-farm payrolls report, which was released on Friday, showed more-than-expected job additions in June.

The unexpectedly strong job data release on Friday fanned speculation that the Federal Reserve could soon start to scale down the pace of its quantitative easing, weighing heavily on gold prices.

Meanwhile, the euro also traded sharply higher on Monday after news reports said that international lenders were ready to approve the next tranche of bailout fund for debt laden Greece.

In general, a weaker U.S. dollar’s boosts the demand for gold as traders dealing in other currencies find it cheaper to buy in the international market.

Commenting over gold’s small rebound, Karim Cherif, an analyst at Credit Suisse said, “The move down (in bullion prices) on Friday was pretty strong, so obviously you would expect some kind of rebound and if you look at currencies, the dollar is coming off earlier highs, so there is a bit of stabilisation in gold after losses,” according to Reuters.

Silver futures were last up 1.70% to $19 an ounce.

In late trading, the iShares Silver Trust (ETF) (NYSE: SLV) was up 1.21% to $18.43, and the iShares Silver Trust (ETF) (NYSE: AGQ) was up 2.42% to $16.10.








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edliston
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.

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.

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