TV: Gold Prices Extend Losses, Silver Prices Plunge As Well
What is the gold price today? Notwithstanding strong buying interest in China as bargain hunters look to capitalize on multi-month low bullion prices, gold prices extended their losses during Asian trading hours on Wednesday as the sell off pressure is mounting on safe haven bets in the wake of improving global macroeconomic environment with investors seeking higher returns in bubbly equity markets. Silver prices also fell sharply in early trading on Wednesday.
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At around 6:00 a.m. EST, gold futures for April delivery fell 0.65% to $1,593.70 while spot gold lost 0.6% to $1,594.51 an ounce.
According to Thomson Reuters, traders in Asia said that although lower prices attracted strong buying interest from China, dwindling global demand for safe haven assets is putting tremendous pressure on prices. In Shanghai, gold’s most active futures contract along with two spot gold contracts hit to their lowest level on Wednesday in almost seven months, a data provided by Reuters showed.
“We have seen quite strong interest in the domestic market as prices weaken, although such demand is unable to push prices much higher,” said a Beijing-based trader while speaking to Thomson Reuters.
Traders in Asia also believe that current trading pattern where bullion prices rise momentarily above key support level during Asian trading, supported by China and other Asian markets, and recede after Asian trading hours might continue.
Gold prices fell 3.5% in the preceding week to settle just over six month low levels. As the global economy shows significant signs of improvement, investors’ faith in riskier assets is growing. The S&P 500 climbed to its 5 year high on Tuesday while the Dow Jones Industrial Average Index is hovering near its all-time-highs. Year-to-date, the S&P 500 Index is up 7 percent while spot gold is down 4%.
However, analysts say that bullion might pullback as it is clearly lying in the oversold territory.
Last week, gold’s Relative Strength Index (RSI) fell below 30, which suggests that the metal has been oversold.
