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Gold continues higher after U.S. data, strong physical demand

Published 08/14/2013, 08:40 PM
Updated 08/14/2013, 08:40 PM

Investing.com - Gold futures continued higher in the early part of Thursday’s Asian following a sturdy showing in Wednesday’s U.S. session.

On the Comex division of the New York Mercantile Exchange, gold futures for September delivery rose 0.58% to USD1,341.8 per troy ounce in Asian trading Thursday. The September contract settled higher by 0.97% at USD1,334.10 per ounce on Wednesday.

Gold futures were likely to find support at USD1,272.10 a troy ounce, the low from Aug. 7, and resistance at USD1,342.90, Monday's high.

In U.S. economic news out Wednesday, the Labor Department said producer prices were flat last month, indicating little in the way of inflationary pressures in the world’s largest economy. Core prices increased 0.1% last month, below the 0.2% increase analysts expected. Year-over-year, the produce price index was up 1.2%.

A weak producer price index suggest inflationary pressures remain soft and an economy still in need of monetary support.

The numbers dampened expectations that U.S. recovery is strong enough for the Federal Reserve to begin tapering its USD85 billion-a-month asset-purchasing program, which has supported gold since its inception.

Although India, the world’s largest gold consumer recently boosted its import tariff on gold and silver imports in an effort to stem a rising current account deficit that is made worse by the weak rupee, market participants see strong physical demand for bullion from Asia.

Elsewhere, Comex silver for September delivery rose 0.36% to USD21.868 per ounce while copper for September delivery fell 0.25% to USD3.338 per ounce.


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