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Gold futures inch higher after Bullard comments

Published 11/04/2013, 09:04 AM
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Investing.com - Gold futures inched higher on Monday, after St. Louis Federal Reserve President James Bullard said the central bank does not have to be in a "hurry" to reduce its monthly bond-purchasing program.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,318.10 a troy ounce during U.S. morning trade, up 0.4%.

Prices held in a tight range between USD1,311.00 a troy ounce, the daily low and a session high of USD1,322.10 a troy ounce. The December contract ended 0.79% lower on Friday to settle at USD1,313.20 a troy ounce.

Gold futures were likely to find support at USD1,273.80 a troy ounce, the low from October 17 and resistance at USD1,327.30, the high from November 1.

Uncertainty over the direction of U.S. monetary policy continued after St. Louis Fed President Bullard said Monday that the central bank does not need to rush to scale back its USD85-billion-a-month stimulus program because inflation is low.

Bullard, who is a voting member of the Fed's policy-making committee this year, also said that there had been substantial progress on the labor market.

His comments came after Dallas Fed President Richard Fisher said that the central bank should scale back its stimulus measures as soon as possible.

Speaking at a conference in Sydney on Monday, Fisher said that he did not expect the Fed’s bond-buying program to increase or go on indefinitely.

Market players now looked ahead to the release of key U.S. economic data later in the week to help assess the timing for a reduction in the Fed’s bond-purchasing program.

The U.S. is set to release preliminary data on third quarter economic growth on Thursday, while October’s highly-anticipated nonfarm payrolls report is scheduled for Friday.

The central bank sounded more optimistic than anticipated in its assessment of the economy following its policy-setting meeting last week, sparking speculation the Fed could start tapering stimulus at its December meeting.

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.

Elsewhere on the Comex, silver for December delivery shed 0.1% to trade at USD21.81 a troy ounce, while copper for December delivery dropped 1.25% to trade at USD3.257 a pound.

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