Investing.com - Gold futures traded modestly lower in the early part of
Tuesday’s Asian session as tapering concerns continue to loom large.
On
the Comex division of the New York Mercantile Exchange, gold futures
for December delivery inched down 0.04% to USD1,326.50 per troy ounce in
Asian trading Tuesday. The December contract settled lower by 0.41% at
USD1,327.00 per ounce on Monday.
Gold futures were likely to
find support at USD1,291.70 a troy ounce, Wednesday's low, and
resistance at USD1,375.10, Thursday's high.
While gold rallied
last Thursday on news that the Federal Reserve will not taper its USD85
billion-a-month in bond purchases, the yellow metal and other precious
metals have given up all of those gains and then some.
Ultra-loose
monetary policies that include asset purchases drive down interest
rates to spur recovery, weakening the dollar in the process and making
gold an attractive hedge.
Some members of the Fed are sending
mixed messages regarding tapering, adding an element of confusion to
financial markets. On Friday, however, St. Louis Fed President James
Bullard said that the U.S. central bank could taper its stimulus program
during its October meeting, which sparked a round of profit-taking that
sent gold prices falling.
However, on Monday, Federal Reserve
Bank of New York President William Dudley said the stimulus program
would stay in place until data show that recovery will be sustained.
"Our
decisions on how to adjust our policy tools—for example, the pace of
asset purchases and forward guidance with respect to the level of
short-term rates—must be rooted in the ongoing flow of information that
informs our judgments about the prospects for a sustainable recovery,"
said Dudley.
Uncertainty appears to be what is hampering gold at
the moment, though may market participants are convinced tapering will
happen before year-end with some expecting it will occur next month.
Elsewhere,
Comex silver for December delivery fell 0.18% to USD21.818 while copper
for December delivery dropped 0.42% to USD3.284.
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