Gold ignores soft U.S. housing data, falls on fears Fed support ending
Published Dec 30, 2013 02:49PM ET
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,201.80 a troy ounce during U.S. trading, down 1.00%. Gold prices traded in a range between USD1,200.30 a troy ounce and USD1,215.80 a troy ounce.
Futures were likely to find near-term support at USD1,195.70 a troy ounce, the low from Dec. 24 and resistance at USD1,218.30, the high from Dec. 27. The February contract settled 0.14% higher on Friday to end at USD1,214.00 a troy ounce.
The National Association of Realtors reported earlier that its pending home sales index increased by a seasonally adjusted 0.2% in November, far shy of market expectations for a 1.0% gain. Pending home sales for October were revised to a 1.2% decline from a previously reported drop of 0.6%.
The disappointing data sent the greenback falling, wiping out gains locked in when the Federal Reserve announced it would trim USD10 billion from its USD85 billion in monthly bond-buying purchases beginning in January.
The Fed has said it may taper the program even more should data show that economic recovery is gaining steam while adding soft patches could prompt the U.S. central bank to hike up monthly bond purchases to ensure price and labor-market stability.
Still, gold futures suffered on sentiments that Fed bond purchases, which support gold by bolstering its image as a hedge to a weaker dollar, will scale back sooner rather than later, ending a multi-year rally fueled by monetary support.
Trading volumes were thin as many investors already closed books before the end of the year, reducing liquidity in the market and increasing volatility, which helped exaggerate market moves.
Elsewhere on the Comex, silver futures for March delivery dipped 2.16% to trade at USD19.615 a pound, while copper for March delivery was down 0.06% at 3.383.
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Written By: Investing.com
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