Investing.com - Gold prices edged lower on Thursday after data
revealed consumer spending and personal incomes rose more than
expected in March a day after the Federal Reserve said it was
cutting the size of its monthly bond-buying program, which has
supported gold since 2012.
Fed bond purchases bolster
by weakening the dollar, as the two assets tend to trade inversely
with one another.
On the Comex division of the New York Mercantile Exchange, gold
futures for June delivery traded at 1,283.90 a troy ounce during
U.S. trading, down 0.93%, up from a session low of $1,277.40 and
off a high of $1,293.10.
The June contract settled down 0.03% at $1,295.90 on
Futures were likely to find support at $1,268.60 a troy ounce,
the low from April 24, and resistance at $1,306.50, Monday's
The Department of Labor reported earlier that the number of
individuals filing for initial jobless benefits last week rose by
14,000 to 344,000 from the previous week's upwardly revised total
Analysts had expected jobless claims to fall by 11,000 to
Offsetting the disappointing jobless claims figures, the
Commerce Department reported earlier that U.S. personal spending
rose 0.9% in March from an upwardly revised 0.5% the previous
month, beating expectations of 0.6%.
Consumer spending is the single biggest component of U.S.
economic growth, accounting for as much as two-thirds of economic
The report added that personal income rose 0.5%, beating
expectations for a 0.4% increase.
Separately, the Institute for Supply Management said its
manufacturing PMI rose to 54.9 last month from 53.7 in March,
outpacing expectations for a 54.3 reading.
The reports came one day after data showed that the U.S. economy
expanded at an annual rate of just 0.1% in the first quarter, well
below forecasts for an expansion of 1.2%, though markets attributed
the poor showing to rough winter weather that disrupted commerce
earlier this year.
Despite the sharp slowdown in growth the Federal Reserve said
Wednesday it would reduce its monthly bond purchases to $45 billion
from $55 billion, as even though growth was nearly flat in the
first quarter, the economy has been showing signs of gaining steam
in recent weeks.
Bond purchases support gold prices by weakening the dollar, and
Thursday's overall positive batch of indicators cemented views that
the Fed will continue tapering its stimulus program as the year
Investors were looking ahead to Friday's April nonfarm payrolls
report, which was expected to show that the recovery in the labor
market was continuing, which further eroded the yellow metal.
Meanwhile, silver for July delivery was down 0.71% at US$19.038
a troy ounce, while copper futures for July delivery were unchanged
at US$3.028 a pound.
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