Investing.com - Gold futures rose modestly in the early part of Thursday’s Asian session, but the yellow metal is once again below the psychologically important USD1,600 an ounce area after a nasty tumble in Wednesday’s U.S. session.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 0.08% to USD1,597 in Asian trading Thursday. The contract settled down 1.25% at USD1,595.30 a troy ounce in U.S. trading on Wednesday.
Gold futures were likely to test support USD1,574.80 a troy ounce, Monday's low, and resistance at USD1,619.40, Tuesday's high.
For the second consecutive day, congressional testimony from Federal Reserve Chairman Ben Bernanke proved to be a major catalyst behind gold’s price action. In testimony given to the House Financial Services Committee, Bernanke reiterated that the Fed’s quantitative easing programs have not stoked inflation in the U.S.
Bernanke gave similar comments on Tuesday before the Senate Banking Committee, but gold moved sharply higher that day.
Traders are now mulling the specter of sequestration, the situation under which USD85 billion in spending cuts are set to go into effect on Friday. With U.S. economy still fragile, market participants view the sequestration issue as a significant hurdle for riskier assets and one that could chase investors into the U.S. dollar.
Even if the economy is seen as significantly improving, that could be the impetus for the Fed to wind down its easing programs, which would also have an adverse impact on gold. The Fed is currently purchasing USD85 billion in Treasuries and mortgage backed securities.
Elsewhere, Comex silver for May delivery gained 0.35% to USD29.087 per ounce while copper for May delivery rose 0.50% to USD3.594 per ounce.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 0.08% to USD1,597 in Asian trading Thursday. The contract settled down 1.25% at USD1,595.30 a troy ounce in U.S. trading on Wednesday.
Gold futures were likely to test support USD1,574.80 a troy ounce, Monday's low, and resistance at USD1,619.40, Tuesday's high.
For the second consecutive day, congressional testimony from Federal Reserve Chairman Ben Bernanke proved to be a major catalyst behind gold’s price action. In testimony given to the House Financial Services Committee, Bernanke reiterated that the Fed’s quantitative easing programs have not stoked inflation in the U.S.
Bernanke gave similar comments on Tuesday before the Senate Banking Committee, but gold moved sharply higher that day.
Traders are now mulling the specter of sequestration, the situation under which USD85 billion in spending cuts are set to go into effect on Friday. With U.S. economy still fragile, market participants view the sequestration issue as a significant hurdle for riskier assets and one that could chase investors into the U.S. dollar.
Even if the economy is seen as significantly improving, that could be the impetus for the Fed to wind down its easing programs, which would also have an adverse impact on gold. The Fed is currently purchasing USD85 billion in Treasuries and mortgage backed securities.
Elsewhere, Comex silver for May delivery gained 0.35% to USD29.087 per ounce while copper for May delivery rose 0.50% to USD3.594 per ounce.