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Gold falls on profit taking, Federal Reserve uncertainty

Published 07/26/2013, 01:09 PM
Updated 07/26/2013, 01:09 PM
Investing.com - Gold prices fell on Friday after investors sold the commodity for profits stemming from Thursday's rally based on soft jobless claims.

The precious metal also fell amid ongoing uncertainty as to when the Federal Reserve will begin to taper its monthly USD85 billion bond-buying program, which has sent gold rising by keeping the dollar weak.

Gold and the dollar tend to trade inversely with one another.

On the Comex division of the New York Mercantile Exchange, gold futures for August traded at USD1,319.75 during U.S. afternoon hours, down 0.68%.

The August contract settled up 0.70% at USD1,328.80 a troy ounce on Thursday.

Gold futures were likely to find support at USD1,308.75 a troy ounce, Thursday's low, and resistance at USD1,347.85, Tuesday's high.

Gold rose on Thursday after the Labor Department reported that the number of individuals filing for initial jobless benefits last week increased by 7,000 to 343,000 compared with expectations for a gain of 4,000 to 340,000.

The numbers weakened the dollar by keeping expectations alive the Federal Reserve will continue stimulating the economy, which was bullish for the yellow metal.

By Friday, profit takers sent prices falling as investors began preparing for next week, when the Bureau of Labor Statistics will release its July jobs report, which could provide markets with more indication as to when monetary stimulus programs may end.

Elsewhere, gold edged lower as a widely watched consumer sentiment gauge beat expectations and rekindled sentiments that the economy is improving and in less need of Fed support.

The Thomson Reuters/University of Michigan consumer sentiment rose more than expected in July, hitting 85.1from 83.9 in June.

Analysts had expected the index to rise to 84.0 this month.

The report also said that inflation expectations fell to 3.1% this month, from 3.3% in June.

Elsewhere on the Comex, silver for September delivery was down 2.10% at USD19.730 a troy ounce, while copper for September delivery was down 2.53% and trading at USD3.105 a pound.









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