Gold Stretches Rally In Europe
FRANKFURT (Oct 21) Gold futures advanced in the early Europe session today buoyed by gains in the equity markets and weakness in the Japanese Yen. However the crude oil futures are traded below $101 dragged by gains in the US dollar.
The U.S. dollar ticked higher Monday after suffering some losses late last week. The ICE dollar index, which measures the U.S. currency against a basket of six major rivals, inching up to 79.679, compared to 79.649 late Friday in North America. The dollar rose against the Japanese yen to buy ¥98.01, up from ¥97.84 Friday
On the economic front today, Japan posted a record 15th straight monthly trade deficit in September, as growth in exports slowed. Exports last month rose 11.5% from a year earlier, the Finance Ministry reported Monday, slipping from a 14.7% gain in August.
Imports rose 16.5%, up from a 16% increase the previous month, as high energy prices continued to take a toll on the Japanese trade account. After data showing exports grew less than expected, the dollar moved back above the 98-yen level.
Gold for December delivery is trading up $6.3 at $1,320.90 an ounce on the Comex division of the New York Mercantile Exchange. Silver for December added 29 cents to $22.20 an ounce.
Last week, the metal gained nearly 4% this week with the bulk of the gains coming on Thursday, following a last-minute congressional deal to fund the government until Jan. 15 and raise the debt ceiling until Feb. 7. That decision sparked widespread ideas that the Federal Reserve won’t consider embarking on its tapering of quantitative easing until March at the earliest.
The US central bank is scheduled to meet October 29-30 to review the economy and assess policy. The possibility of another debt crisis also loomed, as the temporary solution does not resolve the underlying budgetary issues dividing Republicans and Democrats.
In the week ahead, U.S. data releases will be in focus after the shutdown delayed the release of some key economic reports. The Department of Labor is to publish the September nonfarm payrolls report on Tuesday and data on durable goods orders is to be published on Friday.
