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Gold prices edge higher in quiet trade ahead of U.S. data

Published 11/27/2013, 03:12 AM
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Investing.com - Gold prices edged higher in subdued trade on Wednesday, as investors looked ahead to the release of key U.S. economic data later in the day to help assess the timing for a reduction in the Federal Reserve’s bond purchasing program.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,244.85 a troy ounce during European morning trade, up 0.3%.

Comex gold prices held in a tight range between USD1,241.15 a troy ounce and USD1,246.45 a troy ounce.

The February contract ended little changed on Tuesday to end at USD1,241.50 a troy ounce. On Monday, Comex gold fell to USD1,226.40 a troy ounce, the lowest since July 8.

Gold futures were likely to find support at USD1,226.40 a troy ounce, the low from November 25 and resistance at USD1,254.40, the high from November 25.

The U.S. was to release data on durable goods orders as well as a report on manufacturing activity in the Chicago region and revised data on consumer sentiment later in the session.

In addition, the Labor Department was to release the weekly report on initial jobless claims one day ahead of schedule due to Thursday’s Thanksgiving holiday.

The release of mixed U.S. economic data on Tuesday did little to shift expectations that the Federal Reserve will start to taper its stimulus program at one of its next few meetings.

Data showed that U.S. consumer confidence unexpectedly fell to seven month low in November, but a separate report showed that the number of building permits issued in the U.S. rose to the highest level in five years in October.

Prices of the precious metal are down approximately 26% this year on concerns the Fed would start tapering its USD85-billion-a-month asset-purchase program by the end of the year.

The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, fell to the lowest since November 20 earlier in the session, underpinning prices.

Dollar weakness usually benefits gold, as it boosts the metal's appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.

Elsewhere on the Comex, silver for March delivery edged 0.15% higher to trade at USD19.92 a troy ounce, while copper for March delivery inched down 0.15% to trade at USD3.214 a pound.

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