Gold slips to $1,178 an ounce after GDP data
San Francisco (Dec 23) Gold futures slipped in thinly-traded holiday action on Tuesday as solid U.S. growth data pushed the greenback higher and made dollar-denominated commodities more expensive for foreign buyers.
Gold for February delivery GCG5, -0.48% declined $1.80, or 0.2%, to settle at $1,178.00 an ounce on the Comex division of the New York Mercantile Exchange. For the week, gold is down $18 an ounce, or 1.5%.
“I think it’s simply symptomatic of the typical thinly-traded, end-of-year trading sessions for the metal,” said Brien Lundin, editor of Gold Newsletter, in emailed comments. “Last year, for example, we saw similar volatility, as gold would lose $10-$20 over a couple of days, only to quickly bounce right back up.”
“Chart-based technical traders and speculators can use these thin markets to play games and push the gold price around, but bargain-hunting buying usually comes right in from Asia to support the price,” Lundin said.
Gold traded close to the flat line earlier in the session. However, it moved lower after the dollar climbed on the back of data showing the U.S. economy expanded by the fastest pace in 11 years in the third quarter. The gross domestic product grew by 5%, up from a prior reading of 3.9% and an initial estimate of 3.5%.
The Federal Reserve has said it’s watching data closely to determine when to hike interest rates for the first time, so solid economic readings like the GDP data today could raise speculation the central bank will introduce a rate rise next year. Higher interest rates are expected to support the dollar.
Elsewhere in the metals complex,March palladium PAH5, -0.52% fell $1.20, or 0.1%, to settle at $814.05 an ounce, and high grade copper for the same month HGH5, -0.33% declined less a penny to just under $2.87 a pound.
Meanwhile, January platinum PLF5, +0.85% rose $9.60, or 0.8%, to settle at $1.191.70 an ounce, while March silver SIH5, +0.08% rose nearly 8 cents, or 0.5%, to settle at $15.87 an ounce.
Source: MarketWatch
