Gold and silver prices lost luster along with the dollar as
investors pushed up stocks on hopes that the Federal Reserve Open
Market Committee will announce more economic stimulus after its
two-day policy meeting Wednesday.
Spot gold prices fell 0.25% to $1,709.30 an ounce.
SPDR Gold Shares (
), tracking a 10th of an ounce of bullion, shed 0.21% to 165.46.
GLD is consolidating below its 50-day moving average while
holding above its longer-term 200-day average, which means it's
in a weak uptrend.
Silver prices plunged 1.08% to 33.01 an ounce.
IShares Silver Trust (
) dropped 0.93% to 31.84. It's struggling to stay above its
50-day line while trading high above its 200-day line, reflecting
Kitco attributed the weakness in precious metals to traders
liquidating positions ahead of the Federal Open Market
Committee's announcement Wednesday after a two-day policy
meeting. The market expects the Federal Reserve to undergo more
quantitative easing via a new bond buying program, to support the
economy. That would be bearish for the dollar and bullish for
gold and silver. But the precious metals may have already priced
in those sentiments, Jim Wyckoff of Kitco wrote.
PowerShares DB U.S. Dollar Index Bullish (
), measuring the greenback against a basket of major foreign
currencies, gave back 0.30% to 21.90. The dollar lost ground
against the euro on news that German investor optimism rose more
than expected this month. UUP is trading below both its 50- and
200-day moving averages, indicating a very strong downtrend.
CurrencyShares Euro Trust (
) rose 0.57% to 129.07. It's trading above its 50- and 200-day
In afternoon trade, theSPDR S&P 500 (
) was ahead 0.65% to 143.40. It was up as much as 0.9% intraday
but pulled back after Senate Majority Leader Harry Reid said a
compromise over the fiscal cliff would be unlikely before
"While a fiscal cliff deal is still possible, the odds of
going over the cliff appear to be higher than what markets are
discounting, suggesting the potential for heightened downside
risk," Russ Koesterich, managing director and global chief
investment at Blackrock wrote in a commentary. "Second, even if a
deal is reached, it will likely be a relatively small, stopgap
sort of agreement, which would likely still have a negative
impact on economic growth. Third, given how contentious the
debate has been so far, the odds of some sort of comprehensive
'grand bargain' in 2013 seem to be waning.
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