Prices grapple with the possibility of a reduction in U.S. monetary stimulus
Bullion metal prices ended lower on Tuesday, 24 September 2013 at Comex. Prices of precious metals grappled with the possibility of a reduction in U.S. monetary stimulus, but worries about the U.S. budget and debt ceiling helped prices finish off the day's lows. Prices moved up from earlier lower levels on some late short covering and bargain hunting following recent selling pressure.
December gold ended lower by $10.7 (0.8%) at $1316.3 per ounce in morning action on Tuesday. Prices have lost almost 4% in past three sessions.
December silver ended lower by 27 cents or 1.2% of $21.59 per ounce.
Amid a lack of major geopolitical developments or markets-moving economic data the past several days, the world market place continues to buzz about last week's decision by the U.S. Federal Reserve to not taper its monthly bond-buying program and when might the Fed begin that endeavor. Several Federal Reserve officials have already spoken so far early this week, with the common thread among them being that the Fed would begin to wind down its quantitative easing when U.S. economic conditions warrant.
Meantime, European Central Bank officials Tuesday suggested the ECB could implement new monetary policy easing measures if the European Union economies do not show better growth prospects. That helped to put downside price pressure on the Euro currency and also limited buying interest in gold. However, such a development from the ECB would likely be longer-term bullish for gold due to the inflationary implications.
The U.S. budget and debt ceiling issues are looming and will be debated by the U.S. Congress and the Obama administration the next few weeks. This will become a front-burner matter for the market place, and one that could be significantly bearish for most markets, as there is already talk the U.S. government could shut down for a short time.
On the economic front at Wall Street today, September Consumer Confidence Index fell to 79.7 from an upwardly revised 81.8 (from 81.4) in August. The consensus expected the Consumer Confidence Index to drop to 80.0.
At the MCX, gold prices for October delivery closed lower by Rs 54 (0.2%) at Rs 29,820 per ten grams. Prices rose to a high of Rs 29,920 per 10 grams and fell to a low of Rs 29,578 per 10 grams during the day's trading.
At the MCX, silver prices for December delivery closed lower by Rs 241 (0.5%) at Rs 49,52/Kg. Prices opened at Rs 49,390/Kg and fell to a low of Rs 48,640/Kg during the day's trading.
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