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Gold Flat Silver Up

By:
Barry Norman
Updated: Aug 21, 2015, 01:00 UTC

Gold was fairly flat yesterday, after dropping in the previous session to a 3-1/2 month low, as U.S. legislators appeared far from reaching deal to avert

Gold Flat Silver Up
Gold Flat Silver Up
Gold Flat Silver Up

Gold was fairly flat yesterday, after dropping in the previous session to a 3-1/2 month low, as U.S. legislators appeared far from reaching deal to avert tax hikes and spending cuts which could threaten to send the economy back to a recession. Mid-day yesterday, President Obama said that a deal was “close” after saying he would veto the Republican “Plan B”. Markets are hearing a lot of posturing and rhetoric including overnight statements that talks had broken down between the White House and Republican leader Boehner. While other rumors would lead us to believe that a deal could be put to a vote by Friday, ahead of Christmas. Today, we should see some real headway as time is running out.

Rallies in crude oil and a weaker dollar also helped the metal find a firmer footing after Tuesday’s technical sell-off triggered by growing hopes that U.S. legislators are closer to reaching a deal that would avert a fiscal crisis next month. Selling pressure, however, dried up on Wednesday as progress in talks in avoid a fiscal crisis appeared to stall. President Barack Obama accused Republicans of digging in their heels due to a personal grudge against him, while a Republican leader called the president “irrational.” The uncertainty about the U.S. budget talks has dampened investors’ interest in gold. After Tuesday’s sell-off, bullion is on track to end the fourth quarter down almost 6% to match its worst quarterly performance since the third quarter of 2008 at the height of the global economic crisis. That being said one has to realize that gold is trading extremely high and the quarterly loss would be based on exceptionally high prices as gold was driven upwards on the beginning of the quarter after the huge injection of stimulus by the Fed and huge uncertainties over Greece and Spain. Gold had move up to trade just under 1800 with bulls sure that gold would break the 1800 price level, but this never occurred.

Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange traded fund, stood at 1350.52 tons by Dec 19, remains unchanged from the previous business day. Holdings in the world’s largest silver backed exchange-traded fund iShares Silver Trust stood at 9871.29 tons by Dec 19, remains unchanged from the previous business day.

Gold importers in India, the world’s biggest buyer of the metal, continued picking up bargains for weddings gifts as prices of gold dipped.

Industrial metals prices slipped Wednesday due to uncertainty over the outlook for demand, increased by a fall in the number of U.S. house building projects being started in November, while investors also kept a close watch on budget talks in the United States. Silver fell to trade on 31.125 as precious metal and industrial metal demand waned.

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