Friday, August 24, 2012

Why Gold prices down august 24 2012

Why Gold prices down august 24 2012 : Gold prices fell on Friday as investors sold the metal for profits, ending a rally fueled by expectations the Federal Reserve will stimulate the economy via monetary easing measures in the near future. Upbeat durable goods orders helped fuel profit taking.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery were down 0.02% and trading at USD1,670.25 a troy ounce, up from a session low of USD1,662.95 and down from a high of USD1,672.75 a troy ounce early during the session.

Gold futures were likely to test support at USD1,662.95 a troy ounce, the earlier low, and resistance at USD1,675.15, the high from Aug. 23.

Gold prices rallied in recent sessions on hopes the Federal Reserve will stimulate the U.S. economy.

The Fed released the minutes of its July 31 monetary policy meeting earlier this week in which voting members voiced support for monetary accommodation if the economy doesn't pick up the pace of its recovery.

Stimulus measures such as quantitative easing, under which the Fed buys bonds from banks to inject liquidity into the financial system and lower interest rates, weaken the dollar and send gold rising as a side effect.

However, since that meeting, surprisingly sound economic indicators have hit the wire, prompting investors to view that the Fed may hold off after all, including firmer retail sales, consumer sentiment and industrial production figures.

More solid data broke on Friday, which sent gold falling.

The Census Bureau reported earlier that durable goods orders rose to 4.2% in July from 1.6% in June, whose figure was revised up from 1.3%.

Analysts had expected durable goods orders to rise 2.4% last month.

Elsewhere on the Comex, silver for September delivery was up 0.34% and trading at USD30.560 a troy ounce, while copper for September delivery was down 0.29% and trading at USD3.482 a pound

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