Investing.com - Gold futures traded lower on Friday, on investor profit taking, after hitting six week highs yesterday on the Federal Reserve vowing to keep interest rates low and considering additional monetary easing measures
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1722.75 a troy ounce during late U.S. dipping 0.23%.
It earlier soared by as much as 1.9% to trade at USD1730.45 a troy ounce, the highest since December 8.
Gold futures were likely to find support at USD1649.25 a troy ounce, Wednesday’s low and technical resistance exists at USD1761.35 a troy ounce, the high of December 8.
Weakness in the U.S. dollar worked to support precious metal prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.26% to trade at 79.33.
Interestingly, gold's correlation with the euro/dollar exchange rate is at its most positive in nearly 2 years. This means that gold is more likely to move in synch with the euro than at any other time since January 2010.
Gold’s earlier rally was spurred when Fed Chief Ben Bernanke stated yesterday, “We are prepared to provide further monetary accommodation if employment is not making sufficient progress toward our assessment of its maximum level, or if inflation shows signs of moving further below its mandate consistent rate. Bond buying is an option that’s certainly on the table.”
In addition to the Fed’s vow to keep interest rates low until at least late 2014.
Alan Ruskin of Deutsche Bank explained to Bloomberg, “The Fed’s statement reinforced trends that were equity bullish and the risk on trade. The extent of the rally will ultimately be defined by European events, rather than the U.S..”
News that the cost of insuring against default in European corporate debt dropped to the lowest in nearly five months adding to the gold positive sentiment.
In Greek news, European Union Monetary Commissioner, Olli Rehn hinted that Greece is close to a deal with its creditors at the World Economic Forum in Davos.
Rehn stated, “The next three days will be very crucial. An agreement may come, if not today, then over the weekend,” further fuelling the euro’s advance.
Adding to the bullish fever, gold prices broke their 100 day moving average attracting buying from trend funds and other technical traders.
Elsewhere on the Comex, silver for March settlement dipped 0.75% to trade at USD33.49 a troy ounce, while March copper futures advanced 0.40% to trade at USD3.92 a pound.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1722.75 a troy ounce during late U.S. dipping 0.23%.
It earlier soared by as much as 1.9% to trade at USD1730.45 a troy ounce, the highest since December 8.
Gold futures were likely to find support at USD1649.25 a troy ounce, Wednesday’s low and technical resistance exists at USD1761.35 a troy ounce, the high of December 8.
Weakness in the U.S. dollar worked to support precious metal prices. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.26% to trade at 79.33.
Interestingly, gold's correlation with the euro/dollar exchange rate is at its most positive in nearly 2 years. This means that gold is more likely to move in synch with the euro than at any other time since January 2010.
Gold’s earlier rally was spurred when Fed Chief Ben Bernanke stated yesterday, “We are prepared to provide further monetary accommodation if employment is not making sufficient progress toward our assessment of its maximum level, or if inflation shows signs of moving further below its mandate consistent rate. Bond buying is an option that’s certainly on the table.”
In addition to the Fed’s vow to keep interest rates low until at least late 2014.
Alan Ruskin of Deutsche Bank explained to Bloomberg, “The Fed’s statement reinforced trends that were equity bullish and the risk on trade. The extent of the rally will ultimately be defined by European events, rather than the U.S..”
News that the cost of insuring against default in European corporate debt dropped to the lowest in nearly five months adding to the gold positive sentiment.
In Greek news, European Union Monetary Commissioner, Olli Rehn hinted that Greece is close to a deal with its creditors at the World Economic Forum in Davos.
Rehn stated, “The next three days will be very crucial. An agreement may come, if not today, then over the weekend,” further fuelling the euro’s advance.
Adding to the bullish fever, gold prices broke their 100 day moving average attracting buying from trend funds and other technical traders.
Elsewhere on the Comex, silver for March settlement dipped 0.75% to trade at USD33.49 a troy ounce, while March copper futures advanced 0.40% to trade at USD3.92 a pound.