Gold futures were little changed during early trade in Europe today, as investors eye upcoming US data, potentially further pressuring dollar-denominated commodities.
Gold futures for December delivery on the Comex in New York traded at $1 222.7 per troy ounce by 9:29 GMT, up 0.06%. Prices ranged from $1 220.8 to $1 226.4 per troy ounce. The contract has added 0.4% so far this week, though it also reached a nine-month low at $1 208.8.
“There’s no material change in gold’s downward trend even with ongoing geopolitical tensions,” Zhu Runyu, an analyst at CITICS Futures Co., said for Bloomberg. “The US economy is on the recovery path and a rise in interest rates is a matter of time, which will push up the dollar and weigh on gold.”
Silver for December delivery stood for a 0.46% daily drop at $17.697 per troy ounce, while palladium was up 0.87% at $822.90. October platinum was up 0.11% at $1 334.15.
Gold was little changed from the start of US-led air strikes on IS targets in Syria on Tuesday. Gold usually gains investment appeal in times of political or economic trouble, being a so-called “safe haven” asset, whose value remains relatively stable.
Meanwhile, economic data was back on the agenda, with EU and US manufacturing gauges posted yesterday. Eurozones readings were below par, while the US was also just below expectations, though still logging a massive monthly growth. The data was not enough to impact currencies, and commodities, very much, however, as traders await more key data later this week.
New home sales are expected to log a month of moderate growth, adding 4.4% in August. New home sales are a leading indicator for the health of the retail market, which is the largest single sector in the US, accounting for 13% of US GDP.
US durable goods orders are set for a rebound after last month’s all time-high increase. Orders soared 22.6% on a monthly basis in July on the back of massive orders for Chicago-based airplane-manufacturer Boeing. Now orders are looking at a ~18% decrease on a monthly basis, still a significantly lower drop than the jump last month.
GDP figures on Friday are projected to confirm a bullish story for the dollar and US stocks, with the preliminary reading on quarterly growth for Q214 set to log at 4.6%, beating the earlier flash figure of 4.2%.
Betting on an improving recovery in the US, the Fed announced a steeper-than-earlier rate rise in 2015 last week, heavily supporting the US dollar and weighing on dollar-denominated commodities, such as gold.
The Federal Open Market Committee (FOMC) September meeting produced another $10bn cut in monthly government spending on quantitative easing (QE), keeping on track to close the program at its next meeting. Meanwhile the central lending rate was also kept at 0.25%. However, the targeted rate by the end of 2015 was increased from 1.125% to 1.375%, boosting the greenback to a new four-year peak.
Clocking the lowered investor interest in the precious metal, the SPDR Gold Trust, the largest exchange-trade gold fund, saw its bullion assets drop to 773.45 tons, the lowest level since December 2008.
Technical support and resistance levels
According to Binary Tribune’s daily analysis, December gold’s central pivot point on the COMEX stands at $1 224.6. In case futures manage to breach the first resistance level at $1 234.4, the contract will probably continue up to test $1 246.9. In case the second key resistance is broken, the precious metal will likely attempt to advance to $1 256.7.
If the contract manages to breach the first key support at $1 212.1, it will probably continue to slide and test $1 202.3. With this second key support broken, the movement to the downside may extend to $1 189.8.
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