IV:Gold futures trade near 3-week low; eyes on U.S. data, ECB
Investing.com - Gold futures traded near a three-week low on Wednesday, as investors eyed the release of key U.S. jobs data later in the week for further indications on whether the Federal Reserve could begin tapering its stimulus program sooner than expected.
Investors were also awaiting the outcome of Thursday’s European Central Bank policy meeting, amid growing expectations that the central bank will cut rates in order to safeguard the economic recovery in the region.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,312.20 a troy ounce during European morning trade, up 0.3%.
Prices held in a tight range between USD1,309.00 a troy ounce, the daily low and a session high of USD1,315.40 a troy ounce. The December contract ended 0.5% lower on Tuesday to settle at USD1,308.10 a troy ounce.
Gold futures were likely to find support at USD1,273.80 a troy ounce, the low from October 17 and resistance at USD1,327.30, the high from November 1.
Tuesday’s losses came after stronger-than-expected U.S. service sector data fuelled speculation the Federal Reserve could begin to taper its stimulus program sooner than expected.
The Institute of Supply Management said in a report earlier that its non-manufacturing purchasing manager's index rose to 55.4 in October from a reading of 54.4 in September. Analysts had expected the index to decline to 54.0 last month.
Market players now looked ahead to the release of key U.S. economic data later in the week to help assess the timing for a reduction in the Fed’s bond-purchasing program.
The U.S. is set to release preliminary data on third quarter economic growth on Thursday, while October’s highly-anticipated nonfarm payrolls report is scheduled for Friday.
Gold prices have largely tracked shifting expectations as to whether the Fed would start tapering its USD85-billion-a-month asset-purchase program by the end of the year.
Meanwhile, the European Commission cut its forecast for euro zone growth on Tuesday and said that unemployment in the region remains at unacceptably high levels.
The dismal forecast boosted expectations for the ECB to cut interest rates when it meets on Thursday.
Elsewhere on the Comex, silver for December delivery rose 0.5% to trade at USD21.74 a troy ounce, while copper for December delivery inched up 0.1% to trade at USD3.262 a pound.
