TV: Gold Today: Gold Prices on Course to Post Third Straight Weekly Losses, Silver Prices Plunge over 1%
What is the gold price today? Gold prices deepened losses during Asian trading hours on Friday and were on course to post third successive weekly losses as stronger dollar and lack of demand for safe haven bets continued to weigh on gold prices. Meanwhile, silver prices fell more than 1% in early trading on Friday.
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February marked the longest stretch of declines for spot gold in last 16 years. Spot gold slumped 5% last month.
At last check, U.S. gold futures for April delivery lost 0.58% to $1,568.90 an ounce while spot gold fell 0.77% to $1,567.66 an ounce. Silver futures plunged 1.15% to $28.105 an ounce
The U.S. dollar rose against most of the major traded currencies on Friday, making dollar-priced commodities expensive in international markets. While simmering concerns over possible reigniting of euro zone debt crisis due to political stalemate in Italy weighed on the euro, in Washington, lawmakers’ inability in averting the sequester, which is scheduled to kick start from March 1, prompted investors to seek safety in the greenback, pushing up the U.S. unit and weighing on demand for commodities.
Nonetheless, analysts believe that the sequester is too small to make any impact on the U.S. economy and as a result the demand for safe –haven assets such as gold will remain subdued.
In a note to investors, Meir, an analyst at INTL FCStone, wrote, “The $85 billion in spending cuts is simply too small to make much of a difference to the economy and although it could cause some problems, it will have no bearing on influencing investor allocations among different asset classes.”
In addition, significant improvement in the U.S. economy, which is evident by series of better-than-expected economic indicators released this week, is driving investors towards riskier assets.
“We don't see much interest from funds and other investors, who are attracted to the stock market right now, as they are generally more confident in the economy,” said Peter Fung, head of dealing at Wing Fung Precious Metals in Hong Kong, according to Thomson Reuters.
Meanwhile holdings of SPDR Gold Trust (ETF) (NYSE: GLD), world’s largest gold backed ETF, slumped to an almost seven-month low of 1,254.49 tons as of February 28. Thursday marked the eight successive day of outflows, a longest stretch of declines in fund’s history, a data provided by Reuters showed.
