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Gold Holds Ground After Yesterday`S Slide; Tapering Feared

ByICN.com
Published 12/13/2013, 07:01 AM
Updated 07/09/2023, 06:31 AM

Gold took a breather early Friday after yesterday`s 2.2% slump following unexpectedly upbeat US retail sales data which fueled fears of an early tapering to Federal Reserve`s stimulus program.

The bullion market suffered sharp losses in the previous session, as the precious metal`s safe-haven appeal was hammered by fresh signs of a recovering global economy, the latest was data on Thursday showing a strong rise in US retail sales last month, which stoked fears that US central bank could start winding down its bullion-friendly program at its Dec. 17-18 policy meeting.

Spot Gold was up 0.14% at $1,225.10 an ounce as of 09:42 GMT, compared with the yesterday`s slump that sent price to a low of $1,223.30.

The Federal Open Market Committee (FOMC)`s Dec. 17-18 policy meeting is closely anticipated by the broad market, as participants continued to price in a possible reduction in the Fed`s $85 billion of monthly bond purchases before the end of the year.

Data last week showed the US unemployment rate fell to five-year low and the economy grew in the third quarter a faster-than-anticipated rate.
While the outlook of the world`s largest economy looks better in the final three months of the year, the Fed is likely to maintain its easy monetary policy in an attempt to push the recovery into 2014.

The sideway trade continues to be the general trend in the bullion market. Technically, Stochastic is biased to the downside and RSUI is trading below 50. Thus, we expect gold to ride the bearish move today if price breaks below key support at $1,218.00.

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