IV:Gold futures trade above USD1,400 on renewed Syria strike concerns
Investing.com - Gold futures traded above the key USD1,400-level during European morning hours on Wednesday, as renewed concerns over U.S. military action against Syria boosted safe-haven demand.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,406.40 a troy ounce during European morning hours, down 0.4%.
Gold traded in a range between USD1,405.80 a troy ounce, the daily low and a session high of USD1,415.00 a troy ounce. The December contract settled up 1.15% at USD1,412.00 a troy ounce on Tuesday.
Gold futures were likely to find support at USD1,374.10 a troy ounce, the low from September 2 and resistance at USD1,433.50, the high from August 28.
Concerns over a U.S. military intervention against Syria’s government shifted back into focus on Tuesday after the Republican House Speaker John Boehner endorsed President Barack Obama's call for military strikes.
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.
Data on Tuesday showed that manufacturing activity in the U.S. expanded at the fastest rate since April 2011 in August.
The Institute for Supply Management said its purchasing managers’ index rose to 55.7 in August from a reading of 55.4 in July. Analysts had expected a reading of 54.0.
The upbeat data reinforced the view that the Fed could start to unwind its stimulus program at its upcoming policy meeting on September 17-18.
Investors were now looking ahead to Friday’s highly-anticipated U.S. nonfarm payrolls report which is seen as key to the Fed’s decision on tapering.
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.
Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the near-term.
Elsewhere on the Comex, silver for December delivery dropped 2.15% to trade at USD23.90 a troy ounce, while copper for December delivery slumped 0.85% to trade at USD3.285 a pound.
