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Tuesday, July 31, 2012

Gold Futures Prices 8/1/ 2012

Gold Futures outlook Prices 8/1/ 2012 : Gold prices reversed earlier losses in Asian trading on Wednesday on talk the Federal Reserve might punt on any decisions to stimulate the economy via monetary easing during a policy meeting that wraps up later Wednesday.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery were up 0.05% and trading at USD1,613.25 a troy ounce, up from a session low of USD1,612.15 and down from a high of USD1,614.75 a troy ounce early during the session.

Gold futures were likely to test support at USD1,610.75 a troy ounce, the low from July 27, and resistance at USD1,625.95, the high from July 30.

Months of weaker-than-expected economic indicators, ranging from a 1.5% second-quarter GDP growth rate to a slew of dismal monthly jobs reports, have fueled talk the Fed will roll out a new round of bond purchases from banks, a monetary stimulus tool known as quantitative easing that weakens the dollar to spur recovery and hiring.

Gold and the dollar trade inversely from one another, and mere talk that the Fed may intervene can send the precious metal gaining.

The China Logistics Information Center reported Wednesday that its Chinese Manufacturing PMI rose to an annual rate of 50.10 in July, from 50.20 in June.

Analysts had expected the figure to rise to 50.30 last month. The numbers show that while Chinese factory output may be expanding, orders from the country's manufacturing base slowed last month.

The Fed wraps a monetary policy meeting later Wednesday, though talk the Fed may opt to only to extend its forecast as to how long conditions may stick around to merit low borrowing costs may be the only thing the market gets, as the Fed can wait until September to decide if the economy merits serious intervention.

The change in sentiment sent gold dropping earlier before it regained some strength in Asian trading on Wednesday and bumped along a bottom.

The European Central Bank is also holding a monetary policy meeting this week, yet doubts the ECB will take drastic actions to spur the economy kept investors focusing more on the dollar.

Many investors remain wary if the bank will announce outright quantitative easing measures as hoped, opting instead for a round of sovereign bond purchases made with money already circulating in the European economy.

Under quantitative easing, the Fed expands its balance sheet to buy assets, often described as printing money out of thin air, which packs more of a punch.

The European Central Bank's mandate requires it to keep a tighter lid on inflation, which makes the call for quantitative easing harder to make, while the Federal Reserve has more wiggle room to spur recovery since it adheres to dual mandate of price stability and to foster optimal employment conditions.

Elsewhere on the Comex, silver for September delivery was down 0.29% and trading at USD27.833 a troy ounce, while copper for September delivery was down 0.58% and trading at USD3.396 a pound

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