Gold closes At 4-Month High As Bullish Technical Momentum Builds
New York (Feb 25) Gold prices ended the U.S. day session firmer and near the daily high Tuesday. Prices scored another four-month high and were boosted in part on some weak U.S. economic data released Tuesday morning. Also, the gold market bulls continue to gain upside momentum on the charts. April gold was last up $4.60 at $1,342.60 an ounce. Spot gold was last quoted up $5.90 at $1,343.00. March Comex silver last traded down $0.101 at $21.95 an ounce.
Gold and silver traders were looking for some direction from U.S. economic data released Tuesday, highlighted by the consumer confidence index. That index as well as the S&P/Case-Shiller home price index and the Richmond Fed business survey all came in on the weak side of market expectations. That gave a lift to the gold market on notions recent downbeat U.S. economic data will make it harder for the U.S. Federal Reserve to keep backing off on its monthly bond-buying program (quantitative easing). The past few years of very easy U.S. monetary policy have been a bullish underlying factor for the precious metals and all raw commodities, due to the potential for inflationary price pressures.
The Ukrainian civil unrest remains a significant geopolitical factor for the market place. Attention is turning from who will lead Ukraine to how will the nation can survive, financially. The U.S., the European Union and the International Monetary Fund are trying to figure out how to prop up Ukraine’s financial system before it collapses. The situation there remains fluid. The Ukrainian developments and some civil unrest and violence in Thailand recently have prompted increased safe-haven demand for gold.
In overnight news, China’s stock markets were pressured by news the China central bank drained over 100 billion yuan from the Chinese financial system. The move is a short-term tightening of China’s monetary policy, but the longer-term implications of the move are unclear. The move by the Peoples Bank of China did not have much of an impact on world markets.
Source: Kitco News
