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Gold dips on profit taking in cautious trading

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Investing.com -

Investing.com - Profit taking sent gold prices edging lower on Friday, wiping out gains from fears that the downing of a Malaysian Airlines plane over Ukraine and an Israeli ground offensive in Gaza will dampen global economic recovery, keep the dollar weak and make gold an attractive hedge.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at 1,310.50 a troy ounce during U.S. trading, down 0.49%, up from a session low of $1,305.20 and off a high of $1,325.30.

The August contract settled up 1.32% at $1,316.90 on Thursday.

Futures were likely to find support at $1,292.60 a troy ounce, Tuesday's low, and resistance at $1,325.90, Thursday's high.

Gold prices rose on news of Malaysian Airlines crash in Ukraine, with the U.S. blaming Ukrainian pro-Russian separatists for shooting down the aircraft, killing 298 aboard, while an Israeli ground offensive in Gaza also boosted the precious metal.

Concerns that even more sanctions may be slapped on Russia in wake of the incident softened the dollar and bolstered gold by fueling fears the fallout will weigh on global recovery, thus prompting the Federal Reserve and central banks around the world to keep policy loose for longer than once anticipated.

Gold and the dollar tend to trade inversely with one another

U.S. Barack President Obama said Friday, however, that sanctions were aimed at having minimal impacts on the global economy, which opened the door for profit taking and sent gold prices lower.

Disappointing U.S. sentiment data also fueled Friday's profit taking.

The Thomson Reuters/University of Michigan preliminary consumer sentiment index fell to a four-month low of 81.3 in July from 82.5 in June, confounding expectations for rise to 83.0.

Meanwhile, silver for September delivery was down 1.12% at $20.898 a troy ounce, while copper futures for September delivery were down 0.99% at $3.189 a pound.

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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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