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Precious Metals Still Suffer from QE Reduction Talks

August 7, 2013 at 3:54 by Vladimir Vyun

Precious metals extended decline today as speculations about possible quantitative easing tampering by the Federal Reserve continue to haunt the market. The US trade balance deficit narrowed from $44.1 billion in May to $34.2 billion in June, more than market participants have hoped for. The data followed another good macroeconomic report from the United States, adding to evidences of strong economic growth.

Persistently good fundamental data makes traders believe that the Fed will reduce its asset purchase program by the end of the year. Such outlook is negative for commodities. It looks like the recent rally of precious metals was short-lived as prices resumed decline. Gold bulls may argue that the metal reached the area where price was moving sideways previously and this level may provide support. But such hopes look feeble at best.

December futures for delivery of gold slipped $4 (0.31 percent) to $1,277.50 per troy ounce as of 3:03 GMT on COMEX today. September contract for silver lost $0.13 (0.66 percent) to $19.40 per ounce. Spot price for platinum dropped $5.33 (0.37 percent) to $1,422.45 per ounce and palladium declined $0.95 (0.13 percent) to $721.55 per ounce.

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