Investing.com - Gold futures ticked down during U.S. morning trade on Monday, as the U.S. dollar was boosted amid growing concerns over political uncertainty in Spain.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,667.15 a troy ounce during U.S. morning trade, down 0.2% on the day.
Prices traded in a range between USD1,662.55 a troy ounce, the daily low and a session high of USD1,673.95 a troy ounce.
Gold prices were likely to find support at USD1,653.35 a troy ounce, the low from January 28 and near-term resistance at USD1,685.35, the high from January 24.
Gold’s losses coincided with the euro falling to the lowest levels of the session against the U.S. dollar as an escalating political crisis in Spain pushed the country’s borrowing costs higher.
Spanish Prime Minister Mariano Rajoy faced calls to resign from the country’s opposition leader, following allegations that he and senior officials in the ruling Popular Party received secret payments.
The yield on Spanish 10-year bonds rose to 5.43% on Monday from 5.21% on Friday, as investor concerns over the deepening political crisis mounted.
Similar-maturity Italian yields inched up to 4.46% amid uncertainty over the outcome of upcoming elections as former Prime Minister Silvio Berlusconi gained ground in opinion polls.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks, and flock to traditional safe haven assets like U.S. Treasuries and the dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.3% to trade at 79.45.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Losses were limited as investors remained focused on the outlook for Federal Reserve monetary policy following last Friday’s U.S. jobs data.
The U.S. Department of Labor said the economy added 157,000 jobs in December, slightly below expectations for a 160,000 increase, while the unemployment rate ticked up to 7.9% for 7.8% in November.
However, November and December nonfarm payrolls figures were revised up by a combined 127,000 jobs.
The data indicated the U.S. economy has maintained its momentum, but not so much as to alter the view that the Fed will remain accommodative.
The U.S. central bank said last week that it will continue its USD85 billion a month quantitative easing program “if the outlook for the labor market does not improve substantially.”
The Fed also reiterated that it will continue to hold interest rates close to zero until the unemployment rate falls below 6.5%.
The Fed’s quantitative easing program is viewed by many investors as a major source of liquidity that weakens the U.S. dollar and helps support prices of commodities and other hard assets, including gold.
Elsewhere on the Comex, silver for March delivery fell 0.9% to trade at USD31.66 a troy ounce, while copper for March delivery dipped 0.25% to trade at USD3.775 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,667.15 a troy ounce during U.S. morning trade, down 0.2% on the day.
Prices traded in a range between USD1,662.55 a troy ounce, the daily low and a session high of USD1,673.95 a troy ounce.
Gold prices were likely to find support at USD1,653.35 a troy ounce, the low from January 28 and near-term resistance at USD1,685.35, the high from January 24.
Gold’s losses coincided with the euro falling to the lowest levels of the session against the U.S. dollar as an escalating political crisis in Spain pushed the country’s borrowing costs higher.
Spanish Prime Minister Mariano Rajoy faced calls to resign from the country’s opposition leader, following allegations that he and senior officials in the ruling Popular Party received secret payments.
The yield on Spanish 10-year bonds rose to 5.43% on Monday from 5.21% on Friday, as investor concerns over the deepening political crisis mounted.
Similar-maturity Italian yields inched up to 4.46% amid uncertainty over the outcome of upcoming elections as former Prime Minister Silvio Berlusconi gained ground in opinion polls.
The news prompted investors to shun riskier assets, such as industrial commodities and stocks, and flock to traditional safe haven assets like U.S. Treasuries and the dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.3% to trade at 79.45.
A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Losses were limited as investors remained focused on the outlook for Federal Reserve monetary policy following last Friday’s U.S. jobs data.
The U.S. Department of Labor said the economy added 157,000 jobs in December, slightly below expectations for a 160,000 increase, while the unemployment rate ticked up to 7.9% for 7.8% in November.
However, November and December nonfarm payrolls figures were revised up by a combined 127,000 jobs.
The data indicated the U.S. economy has maintained its momentum, but not so much as to alter the view that the Fed will remain accommodative.
The U.S. central bank said last week that it will continue its USD85 billion a month quantitative easing program “if the outlook for the labor market does not improve substantially.”
The Fed also reiterated that it will continue to hold interest rates close to zero until the unemployment rate falls below 6.5%.
The Fed’s quantitative easing program is viewed by many investors as a major source of liquidity that weakens the U.S. dollar and helps support prices of commodities and other hard assets, including gold.
Elsewhere on the Comex, silver for March delivery fell 0.9% to trade at USD31.66 a troy ounce, while copper for March delivery dipped 0.25% to trade at USD3.775 a pound.