FX:Gold futures inch higher as physical demand supports
Forexpros - Gold futures inched modestly higher during European morning hours on Wednesday, as prices remained supported amid speculation demand from China and India, the world’s two largest gold consumers, will remain strong in the near-term.
But gains were limited as persistent concerns over the U.S. fiscal cliff, along with uncertainty over Greece’s debt situation, continued to weigh on sentiment.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,727.15 a troy ounce during European morning trade, up a modest 0.15% on the day.
Prices traded in a tight range between USD1,729.55 a troy ounce, the daily and a session low of USD1,725.75 a troy ounce.
Gold prices were likely to find near-term support at USD1,717.85 a troy ounce, Tuesday’s low and resistance at USD1,737.95, the high from November 11.
In India, officials said demand for the precious metal was expected to climb by as much as 15% in the current quarter due to a decline in prices and festival demand.
The festive season in India will peak with Dhanteras and Diwali this week, while the wedding season continues until December. Gold jewelry forms a key part of gifts in weddings and festivals in India.
Elsewhere, physical demand in China was likely to pick up during November and December, ahead of the Chinese Lunar New Year
Meanwhile, the euro remained supported after German newspaper Bild reported Tuesday that Greece could receive EUR44 billion of financial aid in one lump sum payment, citing German government sources.
But divisions remained between officials from the International Monetary Fund and Europe on how best to reduce Greece’s debt to manageable levels.
A decision on unlocking the country’s next tranche of aid, worth EUR31.5 billion, has been postponed until 20 November.
Investors also remained concerned over the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1.
There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise before then.
Elsewhere on the Comex, silver for December delivery added 0.4% to trade at USD32.61 a troy ounce, while copper for December delivery rose 0.35% to trade at USD3.483 a pound.
