Gold and silver fall on Comex

December 3, 2013

Sydney-Australia (Dec 4)  Gold prices have slipped, while silver notched a new four-and-a-half-month low, as the potential boost from a weaker US dollar struggled with pressure from worries about when the Federal Reserve will wind down its accommodative policies. The most actively traded gold contract, for February delivery, on Tuesday settled $US1.10, or 0.1 per cent, lower at $US1,220.80 a troy ounce on the Comex division of the New York Mercantile Exchange.Silver for March delivery fell 22.4 US cents, or 1.2 per cent, to $US19.065 a troy ounce on the Comex. This was the lowest settlement price since July 8, when silver closed at $US19.038 an ounce.The precious metals were unable to rally even as the US dollar moved sharply lower against the Swiss franc, the Japanese yen and the Australian dollar, a reflection of investor antipathy toward the market, said Ira Epstein, director of the Ira Epstein division at The Linn Group.Gold and silver are trade in US dollars, and a weaker greenback tends to lure foreign buyers to the market by making the metals less expensive for investors who use other currencies. "The problem for gold is that traders have mentally given up on it, they're not worried about all the central bank (money)-printing that's going on in the world," Epstein said.Gold prices had rocketed to record highs on the back of the Fed's successive liquidity injections, as many investors worried that the central bank's efforts to spur economic growth would spark high inflation and weaken the US dollar.However, as the Fed nears winding down its $US85 billion-a-month bond purchases, many of these traders worry the end of the stimulus program will remove a key support from the precious metals market.Gold traders are also looking ahead to Friday (US time), when the US November nonfarm payrolls report is due to be released. The labour market reading is a key input for Fed officials, who have previously said that stronger employment would pave the way for scaling back the central bank's stimulus measures.A report showing employers added close to 200,000 jobs could trigger a drop similar to Monday's 2.3 per cent loss in gold, said Walter de Wet, a metals strategist with Standard Bank."We could be in for some fireworks as the week progresses," traders at TD Securities said in an email.

Silver Phoenix Twitter                 Silver Phoenix on Facebook