Gold bounces back after slack U.S. session

Published 01/28/2013, 09:11 PM
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Investing.com - Gold futures rose during Tuesday’s Asian session after the yellow metal slid during U.S. trade Monday as traders await the latest batch of headlines out of the Federal Reserve.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery gained 0.28% to USD1,659.65 per troy ounce in Asian trading Tuesday. Gold settled down 0.23% at USD1,655.05 a troy ounce in U.S. trading on Monday.

Gold futures were likely to test support USD1,643.25 a troy ounce, the low from Jan. 07, and resistance at USD1,695.85, Tuesday's high.

The Fed wraps up its latest monetary policy on Wednesday and traders are eagerly awaiting any news regarding the central banks USD85 billion per month quantitative easing program. Recently, there have been indications that there is division among Fed governors regarding when the central bank should bring an end to QE.

Those comments plagued gold earlier this month, but the yellow metal would later receive a boost after Fed Chairman Ben Bernanke indicated he is still not comfortable with the pace of the U.S. economic recovery.

Elsewhere, press reports out of China, one of the world’s largest gold consumers, indicate the China Securities Regulatory Commission is mulling the creation of exchange-traded funds to allow investors there to gain access to gold. The ETFs China is considering would track gold futures contracts, not be backed by physical holdings of gold.

Most Chinese investors that opt to invest in gold currently do so with gold bars. Various gold ETFs such as the SPDR Gold Shares, the world’s second-largest ETF of any kind, have been seen as contributing to higher demand and prices for gold.

Meanwhile, Comex silver for March delivery surged 0.63% to USD30.973 per ounce while copper for March deliver added 0.01% to rise to USD3.663 per ounce.


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