Gold falls on U.S. data, government comments on Syria
Published Aug 30, 2013 03:30PM ET
Uncertainty over whether the U.S. will launch missile and air strikes against Syria weakened gold by fueling dollar demand,.
Gold and the dollar tend to trade inversely with one another.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,394.20 during U.S. afternoon hours, down 1.32%.
Gold prices hit a session low of USD1,392.10 a troy ounce and high of USD1,411.10 a troy ounce.
Gold futures were likely to find support at USD1,389.50 a troy ounce, Monday's low, and resistance at USD1,433.50, Wednesday's high.
The December contract settled down 0.42% at USD1,412.90 a troy ounce on Thursday.
The dollar rose after U.S. Secretary of State John Kerry said Washington was confident Syria has used chemical weapons in its civil war and appeared to lay out a case for military action though gains were muted after President Barack Obama said no decision on such a move has been taken.
U.S. data weakened gold prices as well.
The Thomson Reuters/University of Michigan revised consumer sentiment index for August rose to 82.0. from a reading 80.0 in July, beating expectations for an uptick to 80.5.
Also in the U.S., a widely-watched Chicago purchasing managers' index rose to 53.0 this month from 52.3 in July, in line with expectations.
Friday's data rekindled expectations that the Federal Reserve may begin to taper its USD85 billion monthly bond-buying program in September as opposed to later in the year.
Monetary stimulus tools such as Federal Reserve asset purchases weaken the dollar by driving down interest rates, and talk of their dismantling strengthens the greenback and weakens gold.
Also Friday, the Bureau of Economic Analysis revealed that personal spending rose slightly less than expected in July, expanding 0.1% after an upwardly revised 0.6% increase the previous month. Analysts were expecting personal spending to rise 0.3% last month.
Elsewhere on the Comex, silver for December delivery was down 2.74% at USD23.478 a troy ounce, while copper for September delivery was down 0.77% and trading at USD3.236 a pound.
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Written By: Investing.com
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