Silver Dollar Values Prices Increase, But Why Are Gold Prices Down? - Gold Price

Dec. 26, 2012 - PRLog -- Gold futures rose Friday, with deal seekers and short covering leading the precious metal to its first gain in three sessions. Gold for February delivery (US: gcg3) advanced $ 14.20, or 0.9 %, to settle at $ 1,660.10 an ounce on the Comex division of the New York Mercantile Exchange. But Friday's gain wasn't enough to stave off a weekly loss, leaving the contract down 2.2 %. Gold on Friday found a modest safe-haven bid after House Republicans canceled a ballot to raise taxes on top U.S. earners, a move that fed fears that talks to avert the supposed fiscal cliff will fail. How High Will Silver Go? Learn More Kitco Silver >> http://www.silverdollar.cc

The fresh report exposed GDP in the third quarter increased at an annual rate of 3.1 %, the fastest growth since late 2011. That was up from the 2.7 % pace logged last month, and much better than economists' anticipated 2.8 % rate.

A senior commodities broker at R.J. O'Brien & Associates in Chicago told reporters, "The GDP number was much better than projection, so the reasoning is that improving conditions in the economy might suggest a light at the end of the passage as to when the Fed will end QE3." Gold and silver have actually been huge recipients of the FOMC's generous QE3 programs. But there's even more than completion of QE measures regarding why gold prices are down.

Weighing on gold because the beginning of the December is the common decrease in "long" trading activity for the commodity as the year winds down. The Wall Street Journal lately noted that gold traders often shun holding big gold positions in the last several weeks of any year due to thin trading volumes and a deficiency of buyers and sellers that often boost volatility and cause broad price swings. Rare Coins, Silver Coins, Gold Coins, Learn More >> http://www.silverdollar.cc/GOLD-COINS/

What's additionally going on is profit taking. Gold's substantial price move has to do with the metal coming to be a trading vehicle. "Gold has actually become a tradable asset class," clarified Gilani. "It's not a hedge. It's no longer just what it used to be. Investors are purchasing and offering gold as they would other commodity, as they would any type of stock, as they would any ETF," said Gilani.

Simply as investors are taking revenues in other winning assets, they are doing this with gold, which creates more vendors than purchasers ahead of the New Year.

Before Thursday's steep sell-off, gold was up some 6.43 % year-to-date, on track for its 12th successive yearly gain. Shares of the yellow metal began 2012 at $ 1,536.20. Since December 2008, gold rates have actually escalated 89 %.

Holdings in gold-backed exchange traded funds have swelled to a record 2,631.79 measurement tons, a 12 % boost this year. Gilani pointed out that gold's recent fall is something of an anomaly given the liberal and loose financial policies both here and abroad, which have actually devalued paper currencies and stoked inflation jitters.

But don't anticipate the sell off to continue long into the New Year. As Tanweer Akram, a senior financial expert at ING Investment Management informed reporters, the GDP pace in the existing quarter "remains quite soft," which will drive investors back to gold.

For traders aiming to play gold prices when they rise once again, Gilani stated SPDR Gold Trust  is an option, particularly if it keeps a support level at $ 150. Down 1.6 % in afternoon trading and changing hands around $ 158, shares have traded as low as $ 148.28 and as high as $ 174.07 this year. How High Will Silver Go? Learn More Kitco Silver >> http://silverdollar.cc