Gold futures tumbled 2% on Thursday, as stronger-than-expected U.S. economic data fuelled speculation that the Federal Reserve may start tapering stimulus sooner than expected. On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,323.50 a troy ounce during U.S. morning trade, down 1.9%. Prices fell by as much as 2.05% earlier to hit a session low of USD1,321.40 a troy ounce earlier, the weakest level since October 22. The December contract ended 0.28% higher on Wednesday to settle at USD1,349.30 a troy ounce. Gold futures were likely to find support at USD1,310.10 a troy ounce, the low from October 22 and resistance at USD1,361.70, the high from October 28. The dollar strengthened after the Chicago manufacturing purchasing managers’ index jumped to 65.9 in October from 55.7 in September. Analysts had expected the index to decline to 55.0 this month. A separate report showed that that the number of people who filed for unemployment assistance in the U.S. fell broadly in line with market expectations last week. The U.S. Department of Labor said earlier that the number of individuals filing for initial jobless benefits declined by 10,000 to a seasonally adjusted 340,000 last week. Analysts had expected U.S. jobless claims to fall by 11,000 to 350,000 last week from the previous week’s total of 350,000. The data fuelled speculation that the Fed may start tapering stimulus sooner than expected, after the central bank sounded more optimistic than anticipated in its assessment of the economy on Wednesday. The Fed left its USD85 billion-a-month asset purchase program in place following its monthly policy meeting and gave no clear indication whether it would start scaling back stimulus at the December meeting or continue it into the start of 2014. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was up 0.55% to trade at 80.21, the strongest level since October 17. A stronger dollar reduces demand for raw materials as an alternative investment and makes dollar-priced commodities more expensive for holders of other currencies. Elsewhere on the Comex, silver for December delivery plunged 4.5% to trade at USD21.94 a troy ounce, while copper for December delivery shed 0.7% to trade at USD3.302 a pound.
Posted on: Fri, 01 Nov 2013 03:57:12 +0000
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