Gold declines on sentiments Federal Reserve to scale back stimulus


Shutterstock photo - Gold prices fell on Monday amid continuing sentiments the Federal Reserve is closer to scaling back stimulus programs that weaken the dollar to spur recovery.

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

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were down 0.31% at USD1,288.05 a troy ounce in U.S. trading on Monday, up from a session low of USD1,275.45 and down from a high of USD1,300.45 a troy ounce.

Gold futures were likely to find support at USD1,268.75 a troy ounce, Friday's low, and resistance at USD1,391.35, last Monday's high.

Gold continued to fall after Federal Reserve Chairman Ben Bernanke said last week that monetary stimulus measures may taper this year and possibly end next year if the economy improves.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program weaken the dollar to spur recovery, which makes gold an attractive hedge, though talk of their dismantling sends the dollar rising and gold falling.

The Federal Reserve Bank of Philadelphia said late last week that its manufacturing index rose to 12.5 in June from -5.2 in May, well above expectations for a -2.0 reading.

A separate report showed that U.S. existing home sales climbed 4.2% to 5.18 million units in May from April's total of 4.97 million, far surpassing market calls for a 0.6% increase.

Elsewhere on the Comex, silver for September delivery was down 1.14% at USD19.773 a troy ounce, while copper for September delivery was down 1.64% and trading at USD3.049 a pound. - offers an extensive set of professional tools for the Forex, Commodities, Futures and the Stock Market including real-time data streaming, a comprehensive economic calendar, as well as financial news and technical & fundamental analysis by in-house experts.
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This article appears in: Investing Forex and Currencies
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