Gold dips as U.S. budget uncertainties fuel demand for the dollar
Published Mar 01, 2013 01:06PM ET
Gold and the dollar normally trade inversely from one another.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 0.37% at USD1,572.30 a troy ounce in U.S. trading on Friday, up from a session low of USD1,564.20 and down from a high of USD1,586.60 a troy ounce.
Gold futures were likely to test support USD1,564.20 a troy ounce, the earlier low, and resistance at USD1,619.40, Tuesday's high.
Automatic spending cuts are due to take effect in the U.S. later in the day, which could affect many federal programs and slash jobs, shaving as much as a half a percentage point off growth rates for this year, according to some estimates.
Uncertainty as to whether President Barack Obama and congressional Republicans can find common ground to shield the economy from such sharp fiscal adjustments kept investors camped out in the dollar and away from gold.
Positive data out of the U.S. managed to curb gold's losses, allowing for choppy trading at times.
The Institute for Supply Management reported earlier that its manufacturing PMI rose to 54.2 in February, the highest level since June and well above a 53.1 reading in January.
Analysts had expected the February index to fall to 52.5.
The Thomson Reuters/University of Michigan consumer sentiment index rose to 77.6 in February from 76.3 the previous month.
Analysts had expected the index to remain unchanged.
Meanwhile on the Comex, silver for May delivery was up 0.38% and trading at USD28.540 a troy ounce, while copper for May delivery was down 1.25% and trading at USD3.503 a pound.
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Written By: Investing.com
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