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Gold spikes to session highs after durable goods data disappoints

Published 10/28/2014, 08:47 AM
Updated 10/28/2014, 08:47 AM
Gold hits session highs after downbeat durable goods data

Investing.com - Gold prices rose to the highest levels of the session on Tuesday, after weak U.S. durable goods data dampened optimism over the strength of the economy.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at $1,233.20 a troy ounce during U.S. morning hours, up $3.90, or 0.32%.

Prices fell to a session low of $1,222.40 earlier, the weakest level since October 15.

Futures were likely to find support at $1,222.00, the low from October 15, and resistance at $1,255.60, the high from October 21.

Also on the Comex, silver futures for December delivery tacked on 19.2 cents, or 1.12%, to trade at $17.35 a troy ounce.

The U.S. Commerce Department said that total durable goods orders, which include transportation items, decreased by a seasonally adjusted 1.3% last month, disappointing expectations for a gain of 0.5%.

Core durable goods orders, excluding volatile transportation items, eased down by a seasonally adjusted 0.2% in September, compared to forecasts for a 0.5% gain.

Orders for core capital goods, a key barometer of private-sector business investment, fell by 1.7% last month, confounding expectations for a 0.6% increase.

Shipments of core capital goods, a category used to calculate quarterly economic growth, declined 0.2% in September, disappointing forecasts for a 0.7% gain.

Investors awaited the start of a highly anticipated Federal Reserve meeting later in the day.

The Fed was likely to announce the conclusion of its asset purchasing stimulus program, known as quantitative easing, but was also expected to reassure markets that interest rates will remain on hold for some time to come.

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Market players will be scrutinizing the Fed's statement for indications about a possible rate hike and its view on the global economy.

Recent signs of a slowdown in growth in Europe and China fuelled speculation the U.S. central bank could stick to its cautious outlook on monetary policy and delay possible rate hikes.

The dollar index, which tracks the performance of the greenback against a basket of six major rivals, fell 0.25% to 85.40.

Elsewhere in metals trading, copper for December delivery rallied 2.7 cents, or 0.88%, to trade at a two-week high of $3.091 a pound, as concerns over a disruption to supplies from the world's third largest mine in Indonesia boosted prices.

Workers at Freeport-McMoRan's Grasberg mine in Indonesian will hold a one-month strike starting next week, a union official said on Monday, over concern about worker safety.

Grasberg is one of the world's largest copper mines. In 2013, Freeport sold 885 million pounds of copper from Grasberg.

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