Get 40% Off
🤯 This Tech Portfolio is up 29% YTD! Join Now to Get April’s Top PicksGet The Picks – Just 99 USD

Gold drops on bullish U.S. consumer confidence report

Published 01/28/2014, 01:25 PM
Updated 01/28/2014, 01:26 PM

Investing.com - Gold prices dropped on Tuesday after robust consumer confidence data fueled already growing market expectations for the Federal Reserve to conclude a monetary policy meeting on Wednesday by announcing fresh cuts to its USD75 billion monthly stimulus program.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,250.40 a troy ounce during U.S. trading, down 1.04%, up from a session low of USD1,248.90 and off a high of 1,261.20.

The April contract settled down 0.08% at USD1,263.50 on Monday.

Futures were likely to find support at USD1,231.30 a troy ounce, the low from Jan. 23, and resistance at USD1,279.20, the high from Jan. 26.

The Conference Board said its index of consumer confidence improved to 80.7 this month from a downwardly revised 77.5 in December.

Analysts were expecting the index to rise to 78.1, and the numbers fueled expectations that the Fed will conclude a two-day policy meeting on Wednesday announcing fresh cuts to its USD75 billion bond-buying program.

Fed asset purchases tend to weaken the dollar by driving down long-term interest rates, while talk of their dismantling often strengthens the greenback, which historically moves inversely with gold.

Meanwhile a separate report showed that U.S. durable goods orders fell unexpectedly in December.

The Commerce Department reported earlier that durable goods orders fell 4.3% in December, confounding expectations for a 1.8% gain.

Core durable goods, which are stripped of volatile transportation items, orders fell 1.6% in December, the largest drop since March, compared to forecasts for a 0.5% increase.

Orders for core capital goods, a key barometer of private-sector business investment, fell 1.3% last month, confounding expectations for a 0.5% gain and after rising 2.6% in November.

Still, investors bet that months of broad improvements to U.S. economic indicators will prompt the Fed to trim around USD10 billion from its USD75 billion bond-buying program.

Also fueling gold's losses were recovery in global stock markets.

Gold often serves as a hedge when stocks plummet in global selloffs.

Meanwhile, silver for March delivery was down 1.47% and trading at USD19.502 a troy ounce, while copper futures for March delivery were down 0.21% and trading at USD3.252 a pound.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.