Gold’s losses deepen after Syria accepts Russian weapons plan

Investing.com - Gold futures came under heavy selling pressure on Tuesday, as the odds of a U.S. military strike against Syria eased after Syria’s foreign minister said his country will accept Russia’s proposal to put chemical weapons under international control.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,363.70 a troy ounce during U.S. morning hours, down 1.65%.

Gold traded in a range between USD1,362.90 a troy ounce, the daily low and a session high of USD1,391.20 a troy ounce. The December contract ended Monday’s session little changed at USD1,386.70 a troy ounce.

Gold futures were likely to find near-term support at USD1,356.00 a troy ounce, the low from August 22 and resistance at USD1,415.00, the high from September 4.

Gold prices tumbled after Syrian Foreign Minister Walid al-Moallem said that his country will agree to turn over its chemical weapons to international control, easing concerns over a U.S. military strike against Syria.

U.S. President Barack Obama said Monday that he would put plans for a military strike against Syria on hold if the country agrees to a Russian proposal to place its chemical weapons under international control.

Gold prices surged to a three-and-a-half month high of USD1,433.50 a troy ounce on August 28 as safe-haven buying picked up amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.

Meanwhile, investors continued to speculate over the timing of the Federal Reserve’s widely expected reduction in monthly bond purchases following last week’s weaker-than-forecast U.S. jobs report.

Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

The central bank is scheduled to meet September 17-18 to review the economy and assess policy.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

Elsewhere on the Comex, silver for December delivery plunged 2.8% to trade at USD23.05 a troy ounce, while copper for December delivery inched up 0.15% to trade at USD3.283 a pound.

The red metal was supported after official data released earlier showed that Chinese industrial production rose 10.4% in August, beating expectations for a 9.9% increase and accelerating from a 9.7% gain in July.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.