Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold slips lower in cautious trade on ECB speculation

Published 08/07/2012, 02:20 PM
Updated 08/07/2012, 02:21 PM

Investing.com - Gold futures traded lower Tuesday, in cautious action,  as traders remained vigilant amid growing expectations for action by the European Central Bank to ease the debt crisis in the euro zone.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,610.95 a troy ounce during U.S. afternoon trade, giving back 0.18%.

Gold futures were likely to test support at USD1,601.80 a troy ounce, Monday’s low and resistance at USD1,627.50, the high of July 31.

Commodity sentiment was boosted by growing expectations that the ECB will soon take steps to help lower Spanish and Italian borrowing costs after ECB head Mario Draghi indicated last week that the bank may restart its bond buying program.

Investors remained wary after Draghi said that any steps by the bank were conditional on euro zone governments experiencing difficulty on bond markets activating the bloc’s bailout funds to purchase government bonds and accepting strict conditions and supervision.

Gold bulls remained hopeful after U.S. data last week showing an unexpected increase in the U.S. unemployment rate last month kept alive expectations for another round of quantitative easing from the Federal Reserve.

The U.S. economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000, but the unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in June.

Gold and the dollar trade inversely, and talk the Fed is considering easing can weaken the greenback and send the yellow metal higher.

Meanwhile, physical demand from India, the world’s largest gold consumer, looked likely to remain sluggish ahead of the festival season which begins this month and runs through until November, as a result of a weak rainy season.

Rainfall in India as a whole is 20% below the 50-year average and, with the monsoon season half over, India is facing the possibility of a full-blown drought in some regions.

Elsewhere on the Comex, silver for September delivery was up 0.79% to trade at USD28.083 a troy ounce, while copper for September delivery soared 1.50% to USD3.440 a pound.



Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.