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Gold drifts lower in Asia after strong U.S. session

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Shutterstock photo - Gold futures drifted lower in the early part of Friday's Asian session after bullion posted a strong gain during Thursday's U.S. session.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery slipped 0.27% to USD1,673.85 per troy ounce in Asian trading Friday. During the U.S. session bullion settled up 1.34% at USD1,677.75 a troy ounce in U.S. trading, up from a session low of USD1,653.95 and down from a high of USD1,678.75 a troy ounce.

Gold futures were likely to test support USD1,643.25 a troy ounce, Monday's low, and resistance at USD1,695.35, the high from Jan. 2.

Gold caught a bid after the European Central Bank, as was widely expected, decided to leave interest rates unchanged. Some traders expected some hints from ECB President Mario Draghi that rate cuts could be on the docket later this year, but even that language was nowhere to be found.

Gold was also boosted successful auctions of Italian and Spanish debt. Spain's Treasury at auction earlier sold EUR5.8 billion worth of debt, above a target set at EUR5 billion, with the yield on five-year notes down to 3.99% from 4.20% at an auction last week.

Lower borrowing costs are pivotal for Italy and Spain, the Eurozone's third- and fourth-largest economies, respectively. Italy is mired in a recession and so is Spain, though the latter's is made worse with by far the Eurozone's worst unemployment rate. Still, lower bond yields can be seen as positive signs for both economies.

After hitting a four-and-a-half-month low last week, bullion has risen 3%.

Elsewhere, silver for March delivery dropped 0.25% to USD30.840 per ounce while copper for March deliver fell 0.05% to USD3.705 per ounce. Palladium took a step back from a recent rally as the March contract fell 0.17% to USD700.50 an ounce. Platinum for April delivery rose 0.12% to USD1,633.85 an ounce. CPM Group said on Thursday palladium and platinum could rise to record highs due to increased demand lead by ETFs that hold physical deposits of the metals. - 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.

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