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Gold hits session highs after U.S. durable goods data

Published 03/25/2015, 08:42 AM
Updated 03/25/2015, 08:42 AM
© Reuters.  Gold trades just  below $1,200 after U.S. durable goods data

© Reuters. Gold trades just below $1,200 after U.S. durable goods data

Investing.com - Gold prices rose to the highest levels of the session on Wednesday, after data showed that U.S. durable goods orders fell unexpectedly in February, while core orders also slumped, fuelling concerns over the strength of the economy.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery tacked on $4.80, or 0.4%, to trade at $1,196.20 a troy ounce during U.S. morning hours. Prices hit an intraday peak of $1,197.40, the most since March 6.

Futures were likely to find support at $1,167.90, the low from March 20, and resistance at $1,200.00, the high from March 6.

A day earlier, gold inched up $3.70, or 0.31%, to settle at $1,191.40, the fifth consecutive daily gain.

The U.S. Commerce Department said that total durable goods orders, which include transportation items, declined by 1.4% last month, compared to expectations for a gain of 0.4%. Orders for durable goods in January were revised down to a 2.0% gain from a previously reported increase of 2.8%.

Core durable goods orders, excluding volatile transportation items, inched down 0.4% in February, disappointing forecasts for a 0.3% gain. Core durable goods orders fell 0.7% in January.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, added to losses following the disappointing data, down 0.65% to 96.80.

The index is down nearly 4% since hitting a 12-year high of 100.78 on March 13 amid expectations U.S. interest rates will rise at a slower pace than previously thought.

Gold fell to a four-month low of $1,141.60 on March 17 amid concerns that the Fed will start raising rates as early as in June, before rallying more than 4% after the Fed projected a slower pace of rate hikes.

A delay in raising interest rates would be seen as bullish for gold, as it decreases the relative cost of holding on to the metal, which doesn't offer investors any similar guaranteed payout.

Elsewhere on the Comex, silver futures for May delivery rose 5.5 cents, or 0.32%, to trade at $17.03 a troy ounce, while copper for May delivery shed 1.5 cents, or 0.52%, to trade at $2.789 a pound.

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