Gold rises on dip buying, looks to snap losing streak

Investing.com - Gold futures traded higher in the early part of Wednesday’s Asian session as traders in the region bought a recent dip in the yellow metal that was inflicted by uncertainty regarding the Federal Reserve’s quantitative easing program.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery rose 0.71% to USD1,325.60 per troy ounce in Asian trading Wednesday. The December contract settled lower by 0.81% at USD1,316.30 per ounce on Tuesday.

Gold futures were likely to find support at USD1,291.70 a troy ounce, Wednesday's low, and resistance at USD1,331.80, Monday's high.

Gold and other precious metals have been in flux since last week, rising after the Fed surprised markets by not making a tapering announcement and falling as it became evident tapering is not yet entirely off the table.

Many market participants were expecting the U.S. central bank to trim the total by USD10 billion or more.

Conflicting statements from Federal Reserve officials since then have made it unclear when the U.S. central bank will begin scaling back its bond-buying program, which took its toll on gold, especially amid broad expectations that a start date for tapering could come in December.

On Friday, St. Louis Fed President James Bullard said the Fed could decide at its October monetary policy meeting to taper its USD85 billion monthly asset-purchasing program. Bullard’s comments were followed Monday by remarks from Federal Reserve Bank of New York President William Dudley who said the U.S. economy is still not strong enough for the Fed to consider tapering.

Gold traded lower Tuesday due to some decent though not overly strong U.S. data points. In U.S. economic news out Tuesday, the S&P/Case-Shiller Home Price Index, which measures home prices in 20 U.S. metro areas, rose 12.4% in July on a year-over-year basis.

That was inline with economists’ expectations. Prices rose 0.6% from June to July, but economists expected an increase of 0.8%. Thirty-year mortgage rates have risen to about 4.5% from 3.3% at the start of this year.

The Conference Board said its consumer confidence index fell to 79.7 in September from 81.8 in August. The June reading of 82.1 was the highest in five and a half years.

Elsewhere, Comex silver for December delivery jumped 0.83% to USD21.765 per ounce while copper for December delivery fell 0.12% to USD3.259 per ounce.