Gold held positions above a two-week low as investors weighed the strength of the U.S. economy based on mixed data before the Federal Reserve concludes a policy meeting at which it is expected to end its Quantitative Easing program.
Comex gold for delivery in December traded at $1 228.8 per troy ounce at 8:50 GMT, down 0.05% on the day, having shifted within a daily range of $1 230.4 – $1 227.4 The precious metal ticked up by 0.01% to $1 229.4 on Tuesday.
Fed policy makers are likely to consider waiting a while longer before increasing interest rates, due to instability in the financial markets. The central bank said in September it intends to end its monthly bond-buying program, if the economy shows signs of improvement.
“U.S. economic data remains mixed, keeping investors on the sidelines before the Fed meeting,” said Lv Jie, analyst at Cinda Futures, cited by Bloomberg. “Physical demand is quite good, lending some price support.”
US consumer confidence raced to the highest since before the 2008 economic crisis as the labor market continued to improve, while gasoline prices slid. The Conference Board reported that its consumer sentiment index raced to 94.5, the highest since October 2007, defying analysts’ projections for a drop to 87.0. September’s reading received an upward revision to 89.0 from initially estimated at 86.0.
However, not all of the US data was rosy yesterday, which sent the dollar falling. The greenback fell after US durable goods orders unexpectedly slid in September, while a separate report showed house prices in 20 US cities rose less than expected both on monthly and annual basis.
The US dollar index for settlement in December traded at 85.505 at 8:49 GMT, up 0.04%, moving within the range of 85.505 and 85.390 during the day. The US currency gauge slid 0.1% on Tuesday to 85.473 and is traded 1.59% lower from its 4-year high touched on October 3rd.
According to data released from the International Monetary Fund, there has been strong physical demand from Asia. Russia kept a six-month trend of increasing its gold reserves, boosting them by 37 tons in September to a total of 1 149 tons, one of the worlds largest gold reserves.
Kazakhstan added 2.1 tons to its gold holdings to 184 tons. Turkey and Azerbaijan also showed interest in the valuable metal, increasing their stash with 12 tons to 532 tons and 4 tons to 27 tons, respectively.
India celebrated Dhanteras, the biggest gold-buying festival, last Tuesday, while Diwali, the festival of lights, was celebrated on Thursday. China’s net gold imports from main conduit Hong-Kong reached a six-month high in September as the country prepared to celebrate its National Day holiday in the beginning of October.
Assets in the SPDR Gold Trust, the biggest bullion-backed ETP and a proxy for investor sentiment towards gold, fell by 0.2% to 743.59 ton on Tuesday, the lowest since October 2008.
Pivot points
According to Binary Tribune’s daily analysis, December gold’s central pivot point on the Comex stands $1 229.0. If the contract breaks its first resistance level at $1 235.9, next barrier will be at $1 242.3. In case the second key resistance is broken, the precious metal may attempt to advance to $1 249.2.
If the contract manages to breach the first key support at $1 222.6, it may come to test $1 215.7. With this second key support broken, movement to the downside may extend to $1 209.3.
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