Gold Rebounds on Bargain Hunting, Short Covering
SAN FRANCISCO (Sept 25) Comex gold futures prices put on a late-morning surge and held those gains into the close Wednesday, to finish solidly higher in the day. The market saw more short-covering, bargain hunting and a technically related bounce following recent selling pressure. December Comex gold was last up $19.00 at $1,335.30 an ounce. Spot gold was last quoted up $12.30 at $1335.75. December Comex silver last traded up $0.274 at $21.860 an ounce.
Silver futures prices showed little to no reaction to news Wednesday around midday that the U.S. government (Commodity Futures Trading Commission) closed its years-long probe into manipulation of the silver futures market, saying it had no hard evidence that such had occurred.
U.S. economic data Wednesday was slightly on the stronger side of expectations, with the advance report on durable goods up slightly, and new residential home sales at a multi-month high. Recent U.S. economic data has been a mixed bag, with some reports showing modest growth and others suggesting continued stagnation. The recent ambiguous U.S. data tilts in favor of the Federal Reserve continuing its monthly bond-buying program (quantitative easing) for at least a while longer.
The U.S. budget and debt ceiling issues are moving to the front burner of the market place. The U.S. government will have to at least partially shut down at the end of this month if it does not pass a budget. Also, in mid-October the U.S. will hit its borrowing limit. There has already been harsh rhetoric from both political parties on the matters. A U.S. senator has already filibustered on the U.S. budget. This matter could be significantly bearish for most markets in the coming weeks, as there is already talk some of the U.S. government will shut down for a short time. The question for gold traders is whether the yellow metal would follow the raw commodity sector and sell off, or act like a safe-haven asset and rally, if the U.S. government shut down.
The London P.M. gold fix is $1,322.75 versus the previous P.M. fixing of $1,314.25.
