Gold gets support on weak dollar, fails to capitalise on bullish data
Stimulus is likely to be sustained as recent data isn't supportiv of tapering. US employers added fewer jobs and the economy seems to have lost momentum.
Image of Gold egg courtesy of FreeDigitalPhotos.net
Gold prices seemed to have gained support this week on weak US dollar although it failed to capitalise on data which rule out the prospect for December Fed tapering to happen.
Stimulus is likely to be sustained as recent data isn't supportiv of tapering. US employers added fewer jobs and the economy seems to have lost momentum. In Asian markets, India festival demand was relatively weak and higher prices, lower availablility of bullion only added to the woes of the market. India gold imports have fallen from a high of 162 tons in May to 23.5 tons in October just ahead of festival season.
A CME group report on Wednesday trading trends said: It is also possible that gold prices drafted some fresh support from a recovery in North American gold mining shares and it is also possible that gold has somehow managed to align with the positive action in equities. There are some gold bulls that suggest gold's bounce Wednesday was the result of a realization that US data is simply too weak for the number Friday to be strong enough to put the US Fed in a position to begin tapering in December.
Gold dropped 21 percent this year, set for its first annual loss since 2000, amid speculation the Federal Reserve would curb stimulus as economic growth picked up. Gross domestic product grew at a 2 percent annual rate in the third quarter from 2.5 percent in the previous period, Bloomberg reported.
US Gold futures for December delivery weakend to $1315.1 per ounce in electronic trading on Thursday. The head and shoulders pattern in technical charts are intact and further gains to $1350 levels can't be ruled out in the near term given the fundamentals are quite supportive for gold.
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