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Gold modestly lower as traders eye FOMC meeting

Published 10/29/2013, 11:40 AM
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Investing.com - Gold futures inched lower on Tuesday, as traders eyed the start of the two-day Federal Reserve meeting later in the session.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,347.20 a troy ounce during U.S. morning trade, down 0.35%.

Prices traded in range between USD1,340.30 a troy ounce, the daily low and a session high of USD1,360.20 a troy ounce.

The December contract rose to USD1,361.80 on Monday, the strongest level since September 20, before closing at USD1,352.20, little changed on the day.

Gold futures were likely to find support at USD1,310.10 a troy ounce, the low from October 22 and near-term resistance at USD1,366.50, the high from September 20.

The Fed bank is scheduled to start its two-day policy-meeting later Tuesday, with market analysts expecting the central bank to keep its USD85 billion-a-month asset purchase program on track in order to safeguard the faltering economic recovery.

The Conference Board said earlier that its index of consumer confidence dropped to 71.2 in October from an upwardly revised reading of 80.2 in September, as concerns over the U.S. government shutdown and the debt ceiling crisis weighed.

Analysts had expected the index to fall to 75.0 this month.

The data came on the heels of a report showing that U.S. retail sales fell 0.1% in September, compared to expectations for a 0.1% increase. Core retail sales, which exclude automobile sales, edged up 0.4% last month, in line with expectations.

A separate report showed that U.S. producer price inflation ticked down 0.1% in September, missing forecasts for a 0.2% increase. Core inflation edged up 0.1%; in line with expectations.

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.

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 inched up 0.1% to trade at USD22.56 a troy ounce, while copper for December delivery added 0.45% to trade at USD3.284 a pound.

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