Investing.com - Gold futures fluctuated between modest gains and losses on Wednesday, after official data showed that producer price inflation in the U.S. was flat in July and core prices edged slightly higher.
Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,322.70 a troy ounce during U.S. morning hours, up 0.2%.
Gold prices held in a tight range between USD1,315.40 a troy ounce, the daily low and a session high of USD1,326.70 a troy ounce.
Gold futures were likely to find support at USD1,282.80 a troy ounce, the low from August 8 short-term resistance at USD1,347.85, the high from July 23.
The Department of Labor said producer prices were flat last month, confounding expectations for a 0.3% increase.
The core producer price index eased up 0.1% in July, missing forecasts for a 0.2% increase.
The disappointing data raised fresh doubts over whether the economic recovery is strong enough for the Federal Reserve to begin phasing out its USD85 billion-a-month asset purchase program later this year.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.
The December contract settled down 1% at USD1,320.50 a troy ounce on Tuesday after U.S. retail sales data reinforced the view that the economic recovery is strong enough for the Fed to begin tapering its USD85 billion-a-month asset purchase program later this year.
The Commerce Department said that retail sales rose for the fourth successive month in July, rising 0.2%, while core retail sales, which exclude automobile sales, rose at the fastest pace in seven months, climbing 0.5%.
The precious metal is on track to post a loss of approximately 21% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
Elsewhere on the Comex, silver for September delivery rose 1.1% to trade at USD21.57 a troy ounce, while copper for September delivery added 0.2% to trade at USD3.323 a pound.
Copper were supported after data showed that the euro zone’s economy grew for the first time in 18-months in the second quarter, as the region exited a recession.
Preliminary data released earlier showed that the region’s gross domestic product grew by a seasonally adjusted 0.3% in the second quarter, above expectations for growth of 0.2%.
The upbeat data came after a report showed that France’s economy expanded 0.5% in the three months to June, following two consecutive quarters of contraction. Economists had forecast growth of 0.2% quarter-on-quarter.
A separate report showed that Germany’s economy expanded by 0.7% after growing 0.1% in the first quarter. Economists had forecast quarter-on-quarter growth of 0.6%.
Europe as a region is third in global demand for the industrial metal.
Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Fed to reduce its bond purchases.
Any improvement in the U.S. economy was likely to reinforce the view that the central bank will begin to taper its bond purchase program in the coming months.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,322.70 a troy ounce during U.S. morning hours, up 0.2%.
Gold prices held in a tight range between USD1,315.40 a troy ounce, the daily low and a session high of USD1,326.70 a troy ounce.
Gold futures were likely to find support at USD1,282.80 a troy ounce, the low from August 8 short-term resistance at USD1,347.85, the high from July 23.
The Department of Labor said producer prices were flat last month, confounding expectations for a 0.3% increase.
The core producer price index eased up 0.1% in July, missing forecasts for a 0.2% increase.
The disappointing data raised fresh doubts over whether the economic recovery is strong enough for the Federal Reserve to begin phasing out its USD85 billion-a-month asset purchase program later this year.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would end its quantitative easing program sooner-than-expected.
The December contract settled down 1% at USD1,320.50 a troy ounce on Tuesday after U.S. retail sales data reinforced the view that the economic recovery is strong enough for the Fed to begin tapering its USD85 billion-a-month asset purchase program later this year.
The Commerce Department said that retail sales rose for the fourth successive month in July, rising 0.2%, while core retail sales, which exclude automobile sales, rose at the fastest pace in seven months, climbing 0.5%.
The precious metal is on track to post a loss of approximately 21% on the year amid concerns the Fed will start to unwind its stimulus program by the year's end.
An exit from the stimulus would deal a heavy blow to gold, which has thrived on demand from investors who buy gold to hedge against the inflationary risks of loose monetary policies.
Elsewhere on the Comex, silver for September delivery rose 1.1% to trade at USD21.57 a troy ounce, while copper for September delivery added 0.2% to trade at USD3.323 a pound.
Copper were supported after data showed that the euro zone’s economy grew for the first time in 18-months in the second quarter, as the region exited a recession.
Preliminary data released earlier showed that the region’s gross domestic product grew by a seasonally adjusted 0.3% in the second quarter, above expectations for growth of 0.2%.
The upbeat data came after a report showed that France’s economy expanded 0.5% in the three months to June, following two consecutive quarters of contraction. Economists had forecast growth of 0.2% quarter-on-quarter.
A separate report showed that Germany’s economy expanded by 0.7% after growing 0.1% in the first quarter. Economists had forecast quarter-on-quarter growth of 0.6%.
Europe as a region is third in global demand for the industrial metal.