IV:Gold futures little changed in quiet trade; U.S., China data eyed
Investing.com - Gold futures were little changed during European morning hours on Thursday, holding near a two-week high hit earlier in the week as investors took to the sidelines ahead of the release of key Chinese economic data.
Sentiment on precious metal remained upbeat amid indications the Federal Reserve intended to continue its quantitative easing program.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,681.05 a troy ounce during European morning trade, down 0.1% on the day.
Prices held in a tight range between USD1,676.35 a troy ounce, the daily low and a session high of USD1,682.05 a troy ounce, Prices touched a two-week high of USD1,684.85 a troy ounce on Tuesday.
Gold prices were likely to find support at USD1,626.05 a troy ounce, the low from January 4 and near-term resistance at USD1,690.45,the high of January 3.
Market players looked ahead to data from China on fourth quarter gross domestic product for signs of a recovery in the world’s second-largest economy.
The Asian nation is set to release government data on the size of its economy on January 18, along with reports on industrial production and retail sales.
Weaker-than-expected data could prompt policymakers in Beijing to introduce fresh stimulus measures to boost economic activity.
Gold traders were also looking ahead to U.S. economic data later in the day. The country was to produce official data on building permits and housing starts, in addition to the weekly government report on initial jobless claims and data on manufacturing activity in Philadelphia.
Sentiment on precious metal was underpinned after Federal Reserve Chairman Ben Bernanke indicated earlier in the week that the central bank intended to continue its quantitative easing program, clearing some confusion caused by the most recent Fed meeting minutes.
Gold futures tumbled to a four-month low on January 4 after the minutes from the central bank’s December meeting indicated that it could end its quantitative easing program earlier-than-expected.
The Fed’s bond buying program is viewed by many investors as a major source of liquidity that weakens the U.S. dollar and helps support prices of commodities and other hard assets, including gold.
Focus was expected to remain on the U.S. economy, amid growing uncertainty over how the country will tackle the USD16.4 trillion debt ceiling that it reaches in February.
Republicans lawmakers have stated they will demand major spending cuts in exchange for any agreement to raise the debt limit, however President Barack Obama said he won't negotiate on the issue.
Failing to raise the debt ceiling could lead to a first-ever U.S. default that could roil financial markets.
Expectations for more aggressive stimulus measures by the Bank of Japan at its policy meeting next week also underpinned sentiment. Japan’s Prime Minister Shinzo Abe has called on the BoJ to adopt a 2% inflation target in the medium term to help combat deflation.
Expectations of monetary stimulus tend to benefit gold, as the precious metal is seen as a safe store of value and a hedge against inflation.
Elsewhere on the Comex, silver for March delivery shed 0.3% to trade at USD31.45 a troy ounce, while copper for March delivery added 0.4% to trade at USD3.621 a pound.
