Gold soars as sentiment builds that Fed will keep monetary policy loose
Published Apr 29, 2013 12:47PM ET
Gold and the dollar tend to trade inversely from one another.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery were up 0.97% at USD1,467.65 a troy ounce in U.S. trading on Monday, up from a session low of USD1,461.75 and down from a high of USD1,478.15 a troy ounce.
Gold futures were likely to test support USD1,461.75 a troy ounce, the earlier low, and resistance at USD1,484.75, Friday's high.
A rising euro and a falling dollar made gold an attractive buy on Monday.
In Italy earlier, borrowing costs fell to levels not seen since October of 2010 at an auction of five and 10-year bonds, mainly as confidence in the country grew after a new government was sworn in over the weekend and ended two months of political deadlock.
The dollar, meanwhile, remained weaker on Monday despite otherwise bullish data hitting the wire in the U.S.
Official data released earlier revealed that U.S. consumer spending rose 0.2% in March, above expectations for a modest 0.1% increase.
Elsewhere, a separate report released by the National Association of Realtors said its pending home sales index rose by 1.5% in March, beating expectations for a 1% gain.
The dollar continued to face downward pressure and give room for gold to rise after the U.S. Bureau of Economic Analysis revealed in a preliminary report on Friday that the U.S. economy rose 2.5% in the first quarter, missing expectations for a 3.0% increase though an improvement from a 0.4% rise in the previous quarter.
The news stoked already growing expectations for the Federal Reserve to keep monetary stimulus programs in place for several months to come.
Stimulus tools such as the Fed's monthly USD85 billion bond-buying program weaken the greenback to spur recovery.
The Federal Reserve will address monetary policy on Wednesday.
Elsewhere on the Comex, silver for July delivery was up 1.81% at USD24.218 a troy ounce, while copper for July delivery was up 1.43% and trading at USD3.232 a pound.
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Written By: Investing.com
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