Gold Futures Unchanged as Guage Shows Economy Slowing
San Francisco (Nov 24) Gold futures traded steady after a Federal Reserve gauge showed U.S. economic activity fell more than forecast in October, easing concern that policy makers will soon raise interest rates.
The metal has rebounded about 6 percent since touching a four-year low on Nov. 7 as central banks in Europe, Japan and China added to stimulus in a bid to shore up expansion. At their last meeting, Fed officials said that if foreign economies deteriorate further, U.S. growth in the medium-term could be slower than expected.
Money managers added bullish gold wagers at the fastest pace since June in the week ended Nov. 18, the latest U.S. government data show. Prices are heading for the first monthly gain since August. The Chicago Fed national index slowed to 0.14 last month, from 0.29 in September. Economists surveyed by Bloomberg forecast 0.33.
“Any time you get anything with regard to the Fed and it’s disappointing, you get the talk that they may not raise interest rates during the anticipated period of time,” Phil Streible, a senior market strategist at R.J. O’Brien & Associates in Chicago, said in a telephone interview.
Gold futures for February delivery rose 0.1 percent to $1,199.40 an ounce at 10:21 a.m. on the Comex in New York. Trading was 51 percent above the 100-day average for this time of day, data compiled by Bloomberg show.
Through last week, bullion fell 0.3 percent this year as stronger U.S. economic growth drove a rally for the dollar. The metal in 2013 lost 28 percent, ending a 12-year bull run.
Gold climbed 70 percent from December 2008 to June 2011 as the Fed bought debt and held borrowing costs near zero percent in a bid to shore up economic growth.
Switzerland holds a referendum on Nov. 30 to require the Swiss National Bank to hold at least 20 percent of its assets in gold, up from about 8 percent, and never sell any. About 47 percent of voters oppose the measure and 15 percent were undecided, according to a gfs.bern poll released last week.
Silver futures for March delivery gained 0.2 percent to $16.49 an ounce on the Comex.
Source: Bloomberg