Gold prices drop 1% on Iran Accord, Fed taper concerns
Investing.com
Published Nov 25, 2013 03:56AM ET
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,232.15 a troy ounce during European morning trade, down 1%.
Comex gold prices fell to session low of USD1,229.65 a troy ounce earlier, the weakest level since July 8.
The February contract settled 0.02% higher on Friday to end at USD1,244.60 a troy ounce.
Gold futures were likely to find support at USD1,214.55 a troy ounce, the low from July 8 and resistance at USD1,250.50, the high from November 21.
Talks held over the weekend in Geneva among the U.S. and five other global powers and Iran ended in agreement on a "first step deal” that is meant to limit advancements in Iran's nuclear program in exchange for easing economic sanctions against Tehran.
A stronger U.S. dollar also contributed to losses. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.25% to trade at 80.89.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Bearish sentiment on the precious metal remained intact after minutes of the Federal Reserve’s October meeting published last week revealed that the central bank could start scaling back its USD85 billion-a-month asset purchase program in the “coming months” if the economy continues to improve as expected.
Investors are now looking ahead to key U.S. housing data due later in the session to further gauge the strength of the economy and the need for stimulus.
Gold prices are down approximately 27% this year on concerns the Fed would start tapering its USD85-billion-a-month asset-purchase program by the end of the year.
Elsewhere on the Comex, silver for March delivery fell 0.9% to trade at USD19.72 a troy ounce, the lowest since August 8, while copper for March delivery inched down 0.1% to trade at USD3.216 a pound.
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Written By: Investing.com
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