Gold Prices Up; Silver Prices Edge Lower

Gold prices inched up during Asian trading hours on Friday nevertheless the metal is well on course to post its worst weekly performance in last one month as investors remain directionless amid policy stalemate surrounding the U.S. fiscal crisis issue and some contradictory remarks from Washington. Silver prices meanwhile, edged lower in early trading on Friday.

At around 6:30 a.m. EST, U.S. gold futures inched up 0.14% to $1,732.0 an ounce while spot gold gained 0.2% to trade near $1,718 an ounce.

Although gold prices tend to gain during the period of uncertainty, a firmer dollar—which makes dollar dominated commodities, including gold expensive for traders dealing in other currencies than greenback and conflicting statements from Washington with regard to  the progress made by lawmakers on the issue  of fiscal crisis, is weighing on the sentiment.

Unlike last year, when investors rushed to buy safe haven assets such as gold in the backdrop of deteriorating euro zone debt crisis and uncertainty surrounding the U.S. economy, sending gold prices at its historical high level of $1,920 in September, this year investors are rather seeking safety in U.S. dollars, which in turned has pushed up the dollar against all major traded currencies, hurting the demand for gold.

Contradictory statements from lawmakers are not supporting gold prices either. Earlier on Wednesday, Republican lawmaker John Boehner said he was “hopeful” that both sides will succeed in averting U.S. economy slipping towards ‘fiscal cliff’, but on Thursday he said no substantial progress was made.

“On the macro side, the market sees very little direction, while the ‘fiscal cliff’ talk poses much uncertainty and risk,” said Chen Min, an analyst at Shenzhen, China based firm Jinrui Futures while speaking to Thomson Reuters.

Meanwhile, holdings of SPDR Gold Trust (ETF) (NYSE: GLD) continued to rise for fourth successive month in November. So far this year holdings are up 11 tons from last year. As of Wednesday, holdings stood at record high levels of 1,347.018 tons.

Silver slipped 0.21% to trade near $32.27 an ounce.

In pre-market trading, the iShares Silver Trust (ETF) (NYSE: SLV) was down 0.09%, the ProShares Ultra Silver (ETF) (NYSE: AGQ) was down 0.62%, and the ProShares UltraShort Silver (ETF) (NYSE: ZSL) was up 0.03%.

 

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.