Gold and silver prices have extended their losses in trading today, with gold falling to a one-week low. Gold prices have come under pressure after the Federal Reserve Chairman Ben Bernanke did not hint at any further monetary easing to boost the U.S. economy.
Gold prices are also falling as the U.S. dollar strengthened against the euro amid ongoing worries about the euro zone debt crisis.
At last check, spot gold prices were trading 0.65% lower at $1,578.89 an ounce. Earlier, prices fell as much as 1% to $1,577.50 an ounce. Gold futures for delivery in August on the Comex division of the New York Mercantile Exchange are currently trading 0.43% lower at $1,581.10 an ounce. Gold futures fell nearly 2% earlier today.
Giancaludio Torlizzi of T-Commodity told Reuters that the fact that the Fed did not hint to monetary easing has weighed a lot on gold, and of course in this scenario of risk aversion the correlation with the dollar was restored and is having an impact today. Torlizzi said that the outlook for precious metals in the medium-term, however, remains positive because the central banks will have to undertake an expansive monetary policy sooner or later.
Marex Spectron said in a research note now that the QE premium has exited from the price over the last two days, the risk-reward looks favorable, particularly against base metals.
Silver prices are falling for a second straight day. At last check, spot silver was trading 1.05% lower at $28.28 an ounce.
