Gold weakens on upbeat Dudley comments, rising stock prices Gold prices dropped on Monday after Federal Reserve Bank of New President William C. Dudley said he was hopeful the U.S. economy will see better days ahead and stoked hopes that the U.S. central bank will begin scaling back stimulus tools more likely sooner than later, likely in early 2014. Stimulus tools such as the Feds USD85 billion in monthly bond prices seek to spur recovery by driving down interest rates, weakening the U.S. dollar in the process and thus making gold an attractive hedge. On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,273.00 during U.S. afternoon hours, down 1.12%. Gold prices hit a session low of USD1,269.60 a troy ounce and high of USD1,289.00 a troy ounce. Gold futures were likely to find support at USD1,260.70 a troy ounce, Tuesdays low, and resistance at USD1,293.60, Thursdays high. The December contract settled up 0.09% at USD1,287.40 a troy ounce on Friday. Dudley said he was growing increasingly hopeful that the U.S. economy is improving and added fiscal uncertainties may no longer be dragging down recovery as in recent months. While growth in 2013 has been disappointing, I believe a good case can be made that the pace of growth will pick up some in 2014 and then somewhat more in 2015. The private sector of the economy should continue to heal, while the amount of fiscal drag should subside, Dudley said in prepared remarks of a speech he delivered at Queens College, Flushing, New York. Despite near-term concerns, growth prospects among our major trading partners will improve further next year. This combination of events is likely to create an environment in which business investment spending will strengthen. Comments from Dudley, often viewed as a policy dove, pushed gold prices lower by stoking sentiments that the Fed will announce plans to scale back asset purchases in early 2014, likely around March. Dudley said he was looking forward to seeing that recovery pick up soon. I have to admit that I am getting more hopeful, he said. Not only do we have some better data in hand, but also the fiscal drag, which has been holding the economy back, is likely to abate considerably over the next few years at the same time that the fundamental underpinnings of the economy are improving. Elsewhere, National Association of Home Builders/Wells Fargo Housing Market Index came in unchanged in November at 54, missing analysts calls for an uptick to 55 this month, though metals markets shrugged off the report. Elsewhere on the Comex, silver for December delivery was down 1.80% at USD20.353 a troy ounce, while copper for December delivery was down 0.57% and trading at USD3.153 a pound.
Posted on: Tue, 19 Nov 2013 05:45:40 +0000
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