Gold Above $1400 On Geopolitical Tensions, Fed Stimulus Jumble Weighs

Precious-Gold traded above $1400 an ounce on Wednesday amid rising chances of a limited military strike on Syria after President Barack Obama got the backing of key Congressional figures.

Gold is currently trading around $1407.40 an ounce after hitting a high of $1414.85 and a low of $1405.64, following its rise yesterday to one week high of $1416.18.

The shiny metal is taking advantage of its safe-haven characteristic as investors resorted to the metal at the expense of riskier assets on an imminent strike on Bashar al-Assad for his suspected use of chemical weapons against civilians.

Obama won the backing of Republicans John Boehner and Eric Cantor who mentioned they reached an agreement on a draft that allows the usage of force against Syria, ahead of a vote by the committee on Wednesday.

However, gains by gold were limited as the improvement in U.S. data raised expectations of seeing the Federal Reserve taper stimulus later in the month.

A report released yesterday showed that U.S. ISM manufacturing climbed to the strongest since June 2011 to record 55.7 in August from 55.4 in July.

Eyes will focus on U.S. nonfarm payrolls report for August due on Friday, as it will give an update about the status of the labor market.

U.S. employers probably added 180,000 jobs last month after the addition of 162,000 in July, while unemployment rate lingered at 7.4 percent, according to median forecasts.

With the improvement in data, gold is facing a pressure from the possibility of seeing a start in withdrawing QE to $65 billion a month in the coming Federal Reserve meeting on September 17-18.

The dollar index—tracks the greenback`s movements versus a basket of major currencies—climbed to a seven-week high on Tuesday to touch a peak of 82.66, while it is currently hovering around 82.38.