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Gold futures ease off 4-week high, Fed stimulus outlook in focus

Published 10/23/2013, 03:21 AM
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Investing.com - Gold futures edged lower on Wednesday, as investors booked profits from the previous session’s 2% rally which took prices to the highest level since late September.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,334.60 a troy ounce during European morning trade, down 0.6%.

Prices traded in range between USD1,332.90 a troy ounce, the daily low and a session high of USD1,342.20 a troy ounce.

The December contract rallied to USD1,344.70 a troy ounce on Tuesday, the strongest level since September 29, before settling at USD1,342.60 a troy ounce, up 2.04%.

Gold futures were likely to find support at USD1,310.10 a troy ounce, the low from October 22 and resistance at USD1,350.30, the high from September 29.

Tuesday’s rally came as the U.S. dollar weakened after disappointing U.S. payrolls data fuelled speculation that the Federal Reserve will delay plans to start reducing stimulus.

The Department of Labor said that the U.S. economy added 148,000 jobs in September, well below expectations for an increase of 180,000.

The unemployment rate ticked down to a four-and-a-half year low of 7.2% from 7.3% in August, but this was partially due to more people dropping out of the labor force.

The weaker-than-expected data bolstered expectations that the Fed would postpone plans to start scaling back its asset purchase program well into next year.

Gold prices 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.

The central bank is scheduled to meet October 29-30 to review the economy and assess policy.

Elsewhere on the Comex, silver for December delivery shed 0.65% to trade at USD22.64 a troy ounce, while copper for December delivery dropped 0.8% to trade at USD3.308 a pound.

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