Gold futures drop on global growth concerns
Published Jan 23, 2013 09:11PM ET
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were down 0.25% at USD1,682.45 a troy ounce in Asian trading, up from a session low of USD1,681.25 and down from a high of USD1,686.15 a troy ounce.
Gold futures were likely to test support at USD1,669.75 a troy ounce, the low from January 17, and resistance at USD1,694.95, Tuesday's high.
South Korean GDP came in worse than expected, a quarter-over-quarter increase of 0.4 percent -- expectations were for an increase of 0.5 percent. Year-over-year, South Korean GDP Increased 1.5 percent; less than the 1.9 percent economists projected.
Meanwhile, Japan’s trade balance came in wider than anticipated at -0.80 trillion yen; economists had anticipated -0.71 trillion yen.
With both South Korea and Japan’s economies showing signs of sluggishness, investors may be selling gold on fears of deflation.
Later on Thursday, markets will digest data on the state of the Eurozone. France and Germany are expected to report their manufacturing PMIs, a measure of relative economic strength.
The Eurozone as a whole will also report its PMI, which is expected to come in at 46.6, and its services PMI, which is projected to come in at 48.1.
A reading less than 50 indicates economic contraction, while a reading above 50 suggests expansion.
In the U.S., the House of Representatives passed a bill that would extend the nation's borrowing limit, preventing the country from defaulting. Still, the measure was only good for an additional few months; investors may be anticipating continued U.S. budget uncertainity, which could weigh on global growth going forward.
Elsewhere on the Comex, silver for March delivery was down 1.08% and trading at USD32.090 a troy ounce, while copper for March delivery was down 0.07% and trading at USD3.680 a pound.
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Written By: Investing.com
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