Gold prices were seen falling on Tuesday, as it was dragged lower by worries that the Federal Reserve (Fed) may begin to taper its asset-purchasing program sooner than expected. The fall of gold prices were also caused by the ongoing Syrian tension.
Howard Wen, HSBC Securities analyst stated in a note that “The market is likely to be influenced by discussions over tapering and geopolitical tensions relating to the situation in Syria.”
Gold futures edged 0.60% lower at $1,378.40 an ounce at the time of writing, while silver traded 1.34% lower to $23.400 an ounce.
While the US dollar index, measuring the relative strength of the US dollar versus a basket of six major currency counterparts, declined 0.04% lower to 81.7580.
Holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, declined 917.13 tonnes on Monday.
Gold Prices – Syria Conflict
Investors from around the world continue to raise concerns over the ongoing conflict in Syria, as the US President Barack Obama continues to persuade the Congress to approve of the military action to take place in Syria after the Syrian government allegedly used chemical weapons against its civilians.
The Syrian President Bashar al-Assad denied the involvement in the attack; however the US secretary of State John Kerry proposed that if the Syrian President Assad handed over his stockpile of chemical weapons within a week, the US would abandon its plans for a possible military attack.
The Russian Foreign Minister Sergei Lavrov supports the suggestion and said that Moscow would recommend Syria to hand over its chemical weapons under international control.
Fed Scale-back
The recent data released, the US non-farm payrolls had investors worried that the Federal Reserve (Fed) may begin to taper its bond-buying program as early as September. The US payroll figures rose by 169,000 in August, lower than the 180,000 analysts estimated. Investors are looking forward to the next Fed meeting for more clues as to when the Federal Reserve (Fed) would begin to taper its stimulus program. The next meeting is scheduled on September 17-18.
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