It briefly fell as low as $1,383.70 an ounce, after ending the previous New York trading session at $1,404.30 an ounce, a gain of $6.30. See Tuesday’s metals column.
Bullion fell “as the greenback gained ground on the rising conviction that the U.S. economy is indeed on the mend, and as it was also helped by the ongoing ‘review’ of Spain’s debt rating by Moody’s Investor Service,” said Jon Nadler, senior analyst at Kitco Metals Inc. North America, in emailed comments.
The Fed effect
Gold came under pressure in the Asian trading session overnight, as the Federal Reserve’s decision to stand pat on U.S. interest rates and to affirm the size of its bond-purchase program at $600 billion dulled investment demand for the precious metal.
“Markets were expecting [the] Federal Reserve to announce some more bond purchases, which did not happen,” said Chintan Karnani, chief analyst at Insignia Consultants in New Delhi. “As a result, there was profit taking in gold.” Read about the Fed’s decision.
The precious metal extended losses as the U.S. floor session got under way and after a round of U.S. data gave bullion buyers little reason to buy as a hedge against inflation.
U.S. consumer prices rose 0.1% during November, and a separate report showed manufacturing in the New York region improved this month. Plus, the Fed said U.S. industrial output rose in November by the fastest pace in four months. Read more on inflation data. “For gold to rise and make new highs, it needs more news,” Karnani said. Still, the overall bullish trend remains in place from a technical standpoint, “as long as gold remains over $1,369 for the whole of December.”
At a level below $1,369, “buy stops will get triggered and gold could see another big wave of selling to $1,327,” he said. Read More... For the latest updates PRESS CTR + D or visit Stock Market news Today
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