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Gold gains as dollar rally takes a breather

Published 08/26/2014, 02:47 PM
Updated 08/26/2014, 02:49 PM
Gold gains as dollar dips due to profit taking

Investing.com - Gold prices rose on Tuesday after the U.S. dollar, which trades inversely with the yellow metal, cooled its advance in a bout of profit taking.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at 1,284.40 a troy ounce during U.S. trading, up 0.43%, up from a session low of $1,276.20 and off a high of $1,291.70.

The December contract settled down 0.10% at $1,278.90 on Monday.

Futures were likely to find support at $1,273.40 a troy ounce, Thursday's low, and resistance at $1,304.90, the high from Aug. 18.

Gold rose despite data that would have otherwise supported the dollar.

The U.S. Commerce Department reported earlier that total durable goods orders, which include transportation items, surged by 22.6% last month, blowing past expectations for an increase of 7.5%.

Orders for durable goods in June were revised up to a 2.7% gain from a previously reported increase of 1.7%.

However, core durable goods orders, excluding volatile transportation items, contracted 0.8% in July, confounding forecasts for a 0.5% gain. Core durable goods orders rose by 3% in June.

Separately, the Conference Board reported that its widely-watched consumer confidence index rose to 92.4 for August, the highest since October 2007, from 90.3 in July, whose figure was revised down from a previously reported 90.9.

Analysts expected the index to decline to 89.0 in August.

Tuesday's mixed data gave the greenback broad support, as it depicted a strengthening U.S. economy, though profit taking sent the U.S. currency lower and nosed up gold prices, as the dollar had advanced in recent sessions on upbeat data and optimistic comments from Federal Reserve Chair Janet Yellen.

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Geopolitical tensions bolstered gold's safe-haven appeal as well.

Russian President Vladimir Putin was set to meet his Ukrainian counterpart, Petro Poroshenko, later Tuesday amid growing tensions in the region.

On Monday, Ukraine said an armored column including 10 tanks entered from Russia as the government in Moscow unveiled plans to send a second convoy with humanitarian aid.

Elsewhere, investors tracked a lackluster report on U.S. home prices.

The S&P/Case Shiller composite index of 20 metropolitan areas rose 8.1% year over year, shy of expectations for 8.4 percent.

Meanwhile, silver for December delivery was up 0.24% at $19.478 a troy ounce, while copper futures for December delivery were down 0.72% at $3.214 a pound.

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