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Gold futures edge lower as upbeat global data weighs

Published 09/03/2013, 03:25 AM
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Investing.com - Gold futures edged lower during European morning hours on Tuesday, after upbeat economic data on Monday boosted the outlook for the global recovery.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,390.60 a troy ounce during European morning hours, down 0.4%.

Gold traded in a range between USD1,389.40, the daily low and a session high of USD1,395.20 a troy ounce.

Comex floor trading was closed Monday for the Labor Day holiday, and yesterday’s transactions will be booked with today’s trades for settlement purposes.

Gold futures were likely to find support at USD1,374.10 a troy ounce, the low from September 1 and resistance at USD1,411.10, the high from August 30.

Data on Monday showed that Chinese manufacturing activity expanded for the first time in a year in August.

In the euro zone, reports showed that manufacturing activity in Spain and Italy returned to growth for the first time since 2011, fuelling optimism over the global economy.

Fading expectations for imminent U.S. military action against Syria further reduced the safe-haven appeal of the precious metal.

President Obama said over the weekend that he will first seek approval from Congress before ordering a military strike against Syria. A decision is not expected before September 9, when U.S. lawmakers return from their summer recess.

Gold prices surged to a three-and-a-half month high of USD1,433.50 a troy ounce on August 28 as safe-haven buying picked up amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.

Gold traders now looked ahead to key macroeconomic data later this week that will determine when the U.S. will begin withdrawing its stimulus measures.

The U.S. will release a closely watched report on U.S. nonfarm payrolls on Friday amid ongoing speculation over when the Federal Reserve will start to taper its USD85 billion-a-month bond-buying program.

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.

Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the near-term.

Elsewhere on the Comex, silver for December delivery rallied 2.7% to trade at USD24.14 a troy ounce, while copper for December delivery jumped 2.1% to trade at USD3.300 a pound.

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