We have updated our privacy policy and terms & conditions. Find out more here.
0
 

Gold drops on FOMC, Japanese data

By Investing.comCommoditiesJan 31, 2013 02:02AM GMT Add a Comment
 
AA
+
-
Investing.com - Gold prices dropped in Asian trading on Thursday as investors priced in a complacent Federal Reserve and poor Japanese economic data, which stoked demand for the safe-haven dollar.

Gold drops on FOMC, Japanese data
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery were down 0.24% at USD1,677.65 a troy ounce in Asian trading, up from a session low of USD1,675.85 and down from a high of USD1,679.15 a troy ounce.

Gold futures were likely to test support at USD1,658.25 a troy ounce, the low from January 27, and resistance at USD1,692.35, the high on January 21.

On Wednesday, the Federal Reserve's Open Market Committee (FOMC) released the decision from its two day meeting. The FOMC decided not to change its monetary policy in any way, keeping interest rates near zero while continuing to buy roughly USD85 billion worth of securities each month.

With the U.S. economy showing signs of contraction, the Fed's decision not to pursue even more accommodative policy might have been interpreted as negative by the gold market.

Elsewhere, in Japan, economic data indicated that the Japanese economic recovery may be faltering. Japan's industrial production increased only 2.5%, less than the 4.5% economists had been anticipating.

Recent economic data from Japan has shown that the economy may be slowing; coupled with Thursday's industrial production number, the island nation's economy appears to be struggling.

In the U.S., the Federal Reserve is already pursuing extremely aggressive monetary expansion, but it may not be enough to prevent deflation from taking hold of the global economy.

As many gold investors buy the yellow metal for an inflation hedge, the threat of deflation could tame demand in the gold market.

Meanwhile on the Comex, silver for March delivery was down 0.57% and trading at USD31.995 a troy ounce, while copper for March delivery was down 0.31% and trading at USD3.81 per pound.

 
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data .

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Related Articles

Add a Comment

 

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Gold
 
 
 
Are you sure you want to delete this chart?
 
 
 
Are you sure you want to delete this chart?
 
 
 

Successfully Reported

Thank you. This comment has been flagged for a moderator.
_touchLoadingMsg