Gold gains on hopes for Fed to keep stimulus program in place
Published Oct 28, 2013 01:35PM ET
Stimulus tools such as the Fed's USD85 billion in monthly asset purchases aim to spur recovery by driving down interest rates and thus weaken the dollar, making gold an attractive hedge in the process.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,354.20 during U.S. afternoon hours, up 0.13%.
Gold prices hit a session low of USD1,346.30 a troy ounce and high of USD1,361.70 a troy ounce.
Gold futures were likely to find support at USD1,310.10 a troy ounce, Tuesday's low, and resistance at USD1,375.10, the high from Sept. 19.
The December contract settled up 0.16% at USD1,352.50 a troy ounce on Friday.
Soft economic indicators out of the U.S. labor market and elsewhere in the economy have many betting the Federal Reserve will announce no changes to its ultra-loose monetary policy on Wednesday.
Federal Reserve officials have said in the past they will pay close attention to data before deciding on the fate of stimulus measures, and soft weekly jobless claims data, lackluster monthly unemployment reports along with disappointing consumer sentiment and hit-or-miss housing data have markets betting the U.S. central bank will wait before deciding to wind down asset purchases.
Elsewhere, industry data revealed that U.S. pending home sales fell 5.6% last month, down for the fourth consecutive month and well below market calls for a gain of 0.1%, which kept expectations firm for the Fed to keep policy unchanged.
However, the Federal Reserve reported on Monday that U.S. industrial production rose by a 0.6% last month, above expectations for a 0.4% rise and the fastest increase in seven months, which capped gold's gains by stoking expectations that the Fed will scale back stimulus measures either late in 2013 or early in 2014.
Elsewhere on the Comex, silver for December delivery was down 0.45% at USD22.538 a troy ounce, while copper for December delivery was down 0.06% and trading at USD3.267 a pound.
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Written By: Investing.com
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