Gold Holds Above $1250 Ahead Of US Retail Sales

Gold traded slightly higher early Thursday extending the upside movement above the new key support at $1,250 an ounce ahead of first-tier releases from the world`s largest economy.

The bullion market is still closely anticipating fresh action by the Federal Reserve before the end of the year; a possible tapering of its monetary stimulus program that has kept interest rates at historically low levels in recent years, pressure on the US currency, while supporting gold prices. But now the policy outlook might change into next year.

Spot Gold was hovering in the low range of $1,250 as of this writing, compared with today`s open at $1,253.95. The range today is somehow tight still between $1,252.60 and $1,256.90.

Markets will be looking for several key numbers today, starting with Eurozone industrial production for October. Later, we’ll see updates on retail sales and initial jobless claims for the US.

These earlier market movers from the world`s largest economy could be one of last pieces of major economic data ahead of next week`s Fed meeting, which remains the key focus as expectations for the central bank to wind down its bond-buying program have been rising since Friday`s stronger-than-expected jobs report.

Back to Europe where Mario Draghi, the European Central Bank president, is scheduled to speak later in the day, followed by the release of the ECB’s monthly report on economic data and analysis.

The yellow metal is still poised to resume the its early rally this week which was halted yesterday on goods news about a deal on US budget. However, any further upside movement depends on whether price will hold support at $1,250 ahead of FOMC policy meeting.

Democratic and Republican officials on Tuesday night agreed a deal to set spending level until 2015, breaking the latest fiscal deadlock in Congress that has repeatedly threatened the US economic recovery in recent years.

The deal involves an agreement to ease automatic spending cuts by about $60 billion over two years and reduce the US deficit by $23 billion.