Investing.com - Gold prices posted solid gains on Monday after a
data out of the Chinese housing sector fueled concerns that the
global economy still battles headwinds that will prompt the Federal
Reserve to very gradually taper its monetary stimulus programs.
Stimulus tools such as the Fed's $65 billion in monthly bond
purchases tend to weaken the dollar by driving down interest rates,
which bolsters gold's appeal as a hedge.
On the Comex division of the New York Mercantile Exchange, gold
futures for April delivery traded at $1,337.30 a troy ounce during
U.S. trading, up 1.04%, up from a session low of $1,319.10 and off
a high of $1,339.10.
The April contract settled up 0.51% at $1,323.60 on Friday.
Futures were likely to find support at $1,307.70 a troy ounce,
Thursday's low, and resistance at $1,361.70, the high from Oct.
Data released earlier revealed that home prices in major Chinese
cities rose 9.6% in January, short of December's 9.9% growth.
Growth fell for the first time in 14 months in January, which
fueled already growing fears that the world's second largest
economy is slowing as the government tries to address bad loans and
weak lending institutions.
While the data did spark safe-haven greenback demand, U.S.
monetary policy concerns bolstered the yellow metal.
The data, which came in wake of a string of soft U.S. economic
indicators, convinced investors that even though the U.S. economy
continues to improve, potholes will steer the Fed to very gradually
taper its dollar-weakening stimulus programs this year, while
tightening remains far off on the horizon.
Meanwhile, silver for May delivery was up 1.19% and trading at
US$22.075 a troy ounce, while copper futures for May delivery were
down 0.71% at US$3.237 a pound.
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