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Gold, silver extend gains after weak ADP data; Fed decision ahead

Published 10/30/2013, 08:47 AM
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Investing.com - Gold and silver prices extended gains on Wednesday, after data showed that U.S. non-farm private employment rose at the weakest pace in six months in October, while investors eyed the Federal Reserve's policy statement later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,355.20 a troy ounce during U.S. morning trade, up 0.7%.

Prices traded in range between USD1,338.70 a troy ounce, the daily low and a session high of USD1,358.80 a troy ounce.

The December contract ended 0.5% lower on Tuesday to settle at USD1,345.10 a troy ounce.

Gold futures were likely to find support at USD1,329.50 a troy ounce, the low from October 23 and near-term resistance at USD1,361.70, the high from October 28.

Payroll processing firm ADP said in a report earlier that non-farm private employment rose by a seasonally adjusted 130,000 in October, below expectations for an increase of 150,000.

The previous month’s figure was revised down to a gain of 145,000 from a previously reported increase of 166,000.

While not viewed as a reliable guide for the government jobs report due on November 9, it does give guidance on private-sector hiring.

A separate report showed that consumer price inflation in the U.S. rose in line with expectations in September, while prices excluding food and energy costs inched up modestly.

The U.S. Department of Labor said that consumer prices rose by a seasonally adjusted 0.2% in September, meeting forecasts, after rising by 0.1% in August.

Consumer prices, excluding food and energy costs, inched up 0.1% in September, below forecasts for a 0.2% increase. Core consumer prices rose 0.1% in August.

Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.

The central bank is scheduled to conclude its two-day policy-meeting later Wednesday, with market analysts expecting policy-makers to keep stimulus unchanged in order to safeguard the faltering economic recovery.

Prices of the precious metal have largely tracked shifting expectations as to whether the Fed would start tapering its USD85-billion-a-month asset-purchase program by the end of the year.

Elsewhere on the Comex, silver for December delivery rallied 2% to trade at USD22.94 a troy ounce, while copper for December delivery jumped 1.25% to trade at USD3.319 a pound.

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