Gold pares U.S. gains following BoJ stimulus news

Published 01/22/2013, 09:29 PM
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Investing.com - Gold futures fell slightly during Wednesday’s Asian session, paring gains notched during Tuesday’s U.S. session after the Bank of Japan announced more easing measures.

On the Comex division of the New York Mercantile Exchange, gold for February deliver slipped 0.03% to USD1,692.65 per troy ounce in Asian trading Wednesday. During U.S. trading Tuesday, the yellow metal settled up 0.39% at USD1,693.65 a troy ounce.

Gold futures were likely to test support USD1,666.55 a troy ounce, Thursday's low, and resistance at USD1,696.25, Thursday's high. Stiff technical resistance is also seen at the USD1,700 mark.

Traders see a move above USD1,700 and then USD1,710 per ounce as having the potential to bring new buyers into the gold market, eliciting further upside for bullion in the process.

At the conclusion of its two-day meeting, the Bank of Japan did what many traders expected and that is raise its inflation target to 2% from 1%. The 2% target matches that of Prime Minister Shinzo Abe.

While the Japanese central bank did commit to an open-ended Federal Reserve-style asset-buying program, BoJ said it will not begin that program until next. That disappointed eager traders that want to see the ailing Japanese economy stimulated sooner. In the process, gold’s Tuesday gains were somewhat muted.

In U.S. economic news, the National Association of Realtors said home sales fell 1% in December to a seasonally adjusted annual rate of 4.94 million units. Economists expected a gain of 5.1 million units on a seasonally adjusted basis. The inventory of existing homes for sale fell 8.5% to 1.82 million units in November.

Elsewhere, Comex silver for March delivery added 0.02% to 32.185 per ounce while copper for March delivery fell 0.34% to 3.691 per ounce.


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