Gold futures edge higher ahead of U.S. data, Fed policy in focus

Written By Unknown on Kamis, 15 Agustus 2013 | 23.06

Investing.com - Gold futures edged higher on Thursday, as investors looked ahead to the release of a series of U.S. economic data later in the trading day amid ongoing uncertainty over the timing of the Federal Reserve's widely expected reduction in monthly bond purchases.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,337.40 a troy ounce during European morning hours, up 0.3%.

Gold prices held in a range between USD1,334.70 a troy ounce, the daily low and a session high of USD1,345.80 a troy ounce.

Gold futures were likely to find support at USD1,282.80 a troy ounce, the low from August 8 short-term resistance at USD1,347.85, the high from July 23.

The December contract settled up 1% at USD1,333.40 a troy ounce on Wednesday, after hitting a session high of USD1,345.80 a troy ounce, the strongest level since July 24.

Gold's gains on Wednesday came after official data showed that U.S. producer prices were flat last month, confounding expectations for a 0.3% increase.

The core producer price index eased up 0.1% in July, missing forecasts for a 0.2% increase.

The disappointing data raised fresh doubts over whether the economic recovery is strong enough for the Fed to begin tapering its USD85 billion-a-month asset purchase program later this year.

Market players now looked ahead to U.S. data on consumer inflation, jobless claims and industrial production, as well as reports on manufacturing activity in New York and Philadelphia.

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 coming months.

The precious metal is on track to post a loss of approximately 20% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.

An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.

Elsewhere on the Comex, silver for September delivery was up 0.7% to trade at USD21.94 a troy ounce, the highest level since June 14.

Meanwhile, copper for September delivery dipped 0.75% to trade at USD3.315 a pound. The industrial metal rose to a ten-week high of USD3.348 a pound on Wednesday.

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