Gold advances as U.S. wholesale pricing report disappoints
Published Aug 14, 2013 02:08PM ET
Monetary stimulus programs such as the Fed's USD85 billion in monthly asset purchases tend to weaken the dollar by driving down long-term interest rates, which makes gold an attractive venue as long as such tools remain in place.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,332.40 during U.S. afternoon hours, up 0.90%.
Gold prices hit a session low of USD1,315.40 a troy ounce and high of USD1,334.30 a troy ounce.
The December contract settled down 1.03% at USD1,320.50 a troy ounce on Tuesday.
Gold futures were likely to find support at USD1,272.10 a troy ounce, the low from Aug. 7, and resistance at USD1,342.90, Monday's high.
In the U.S. earlier, the Department of Labor reported that the country's producer price index came in flat last month, missing expectations for a 0.3% increase after a 0.8% increase in June.
The core producer price index rose 0.1% in July, missing forecasts for a 0.2% increase.
A weak producer price index suggest inflationary pressures remain soft and an economy still in need of monetary support.
The numbers dampened expectations that U.S. recovery is strong enough for the Federal Reserve to begin tapering its USD85 billion-a-month asset-purchasing program, which has supported gold since its inception.
Elsewhere, gold saw added demand on reports of rising physical demand in Asia.
Also on the Comex, silver for September delivery was up 1.85% at USD21.737 a troy ounce, while copper for September delivery was up 0.57% and trading at USD3.336 a pound.
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Written By: Investing.com
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