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Gold bounces back slightly in Asia

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Shutterstock photo - Gold futures rose modestly in the early part of Tuesday's Asian session, bouncing back from a small loss incurred during Monday's U.S. session. However, it appears as though the possible end of quantitative easing in the U.S. is still weighing on traders' minds.

On the Comex Division of the New York Mercantile Exchange, gold futures for February delivery rose 0.24% to USD1,650.25 per troy ounce in Asian trading Tuesday. During Monday's U.S. session gold futures for February delivery were down 0.19% at USD1,645.75 a troy ounce in U.S. trading, up from a session low of USD1,643.25 and down from a high of USD1,662.55 a troy ounce.

Gold futures were likely to test support USD1,626.05 a troy ounce, Friday's low, and resistance at USD1,695.35, Wednesday's high.

Gold has been under pressure since late last week when the most recent meeting minutes from the Federal Open Market Committee indicated division among Federal Reserve governors regarding when to bring quantitative easing to an end. While the Federal Reserve has been open its intent to leave U.S. interest rates low until the unemployment rate in the world's largest economy, currently 7.8%, drops below 6.5%, no hard and fast date for the end of monetary easing has been discussed.

The Federal Reserve is currently purchasing USD40 billion in mortgage-backed securities and USD45 billion in Treasuries per month in an effort to stimulate economic growth.

While gold recently capped its 12th consecutive annual gain and not all of those annual gains came with the benefit of quantitative easing, monetary easing is seen as helpful to gold bulls because it depresses the U.S. dollar and gold is dollar-denominated.

Conversely, gold could still rise if its safe haven status is restored amid a contentious debt ceiling debate or faltering economic growth.

Elsewhere, Comex silver for March delivery jumped 0.65% to USD30.278 while copper for March delivery rose 0.04% to USD.3687 per ounce. - 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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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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