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Gold steady ahead of central bank meetings

Published 07/31/2012, 10:02 AM
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Investing.com - Gold futures remained steady on Tuesday, as the euro remained little changed against the U.S. dollar, ahead of closely watched policy meetings by the European Central Bank and the Federal Reserve this week.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,622.25 a troy ounce during early U.S. trade, inching up 0.05%.

Gold futures were likely to test support at USD1,610.75 a troy ounce, the low from July 27, and resistance at USD1,628.55, the high from July 17.

Overall market sentiment remained muted amid expectations for the Fed and the ECB to ease monetary policy this week, in an attempt to spur economic growth in the U.S. and stem the long running debt crisis in the euro zone.

Expectations that the ECB is set to announce bold measures to tackle the debt crisis have been mounting after the bank’s head Mario Draghi pledged last week to do whatever is necessary to preserve the euro.

But investors remained wary amid concerns that an inadequate policy response by the ECB could send markets lower.

Market participants were also eyeing the outcome of the Federal Reserve’s policy setting meeting on Wednesday, amid speculation over whether the U.S. central bank will indicate if further quantitative easing measures are imminent.

Gold and the dollar trade inversely, and talk the Fed is considering more easing can weaken the greenback and drive investors to buy the precious metal.

Also Tuesday, data showed that gold exports to Iran helped narrow Turkey’s trade deficit in June.

Sanctions on Iran as a result of the country’s disputed nuclear program have seen the rial currency diminish severely in value, seeing Iranians turning to gold for savings.

Elsewhere on the Comex, silver for September delivery was up 0.27% to trade at USD28.098 a troy ounce, while copper for September delivery rose 0.44% to USD3.430 a pound.

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