Gold Flattens Near $1240 In Asia

Shanghai (Jan 31)  Gold futures are trading flat near $ 1240 an ounce in the Asia electronic session today after tumbling by nearly 2% yesterday after robust U.S. gross domestic product data raised the expectation for the Federal Reserve to continue trimming its stimulus program.

Gold for April delivery is trading at $ 1242.7 per ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it fell $19.70, or 1.6%, to settle at $1,242.50 an ounce.

Silver for March delivery is trading up $0.029 at $ 19.15 a troy ounce today. Yesterday, it lost 43 cents, or 2.2%, to $19.13 an ounce following the sharp rally in US dollar.

The dollar rallied yesterday after the Commerce Department said gross domestic product expanded 3.2% in the three months to December, in line with most forecasts, even outpacing some, following a 4.1% rise in the third quarter.

Consumer spending rose by 3.3%, the strongest since the fourth quarter of 2010, exports grew by 11.4%, while government consumption shrank, which drew praise from markets. The data strengthened the dollar by keeping expectations firm for the Federal Reserve to continue trimming its monthly bond-buying program.

Elsewhere on Thursday, the Labor Department said the number of individuals filing for unemployment assistance in the U.S. last week rose by 19,000 to 348,000 from the previous week's revised total of 329,000.

Separately, the National Association of Realtors said its pending home sales index dropped by a seasonally adjusted 8.7% last month, disappointing expectations for a 0.3% gain, which also failed to dampen spirits.

MCX February gold futures may open today's session near Rs 29400 levels with resistance near Rs 29500 levels and support around Rs 29350-300 levels