Gold futures fall to 3-1/2 week low on Fed taper concerns

Published 11/12/2013, 08:59 AM
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Investing.com - Gold futures fell to a three-and-a-half week low on Tuesday, amid ongoing expectations the Federal Reserve will begin unwinding its stimulus programs by the end of the 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.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,280.60 a troy ounce during U.S. morning trade, down 0.05%.

Comex gold prices fell to USD1,275.80 a troy ounce earlier, the weakest level since October 17.

The December contract settled 0.27% lower on Monday to end at USD1,281.80 a troy ounce.

Gold futures were likely to find near-term support at USD1,273.80 a troy ounce, the low from October 17 and resistance at USD1,313.30, the high from November 8.

Speculation that the Fed may start to taper its USD85 billion-a-month asset purchase program as soon as next month mounted after official data last week showed that the U.S. economy added 204,000 jobs in October, much more than the 125,000 increase forecast by economists.

Market players are looking ahead to Thursday’s Senate hearing to confirm Janet Yellen as the first chairwoman of the Federal Reserve.

Gold prices are down approximately 24% this year on concerns the Fed will begin to scale back its stimulus sooner than expected.

Elsewhere on the Comex, silver for December delivery shed 0.5% to trade at USD21.18 a troy ounce, while copper for December delivery declined 0.55% to trade at USD3.242 a pound.

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