Gold Extends Gains As Deadlock Continues
SHANGHAI (Oct 8) Gold futures extended gains in the Asia electronic session today as the deadlock in Washington, which has resulted in the first partial shutdown of the U.S. government in 17 years, boosted safe haven appeal of metal.
December gold futures are trading up 0.7 at $ 1325.8 an ounce on the Comex division of the New York Mercantile Exchange. Yesterday, it rose $15.20, or 1.2%, to settle at $1,325.10 an ounce. Silver for December contract rose 63 cents, or 2.9%, to end at $22.39 an ounce on Monday.
On the data front today, the HSBC China Services Purchasing Managers' Index fell to 52.4 in September from 52.8 in August, HSBC Holdings PLC said on Tuesday. New orders continued to increase in the service sector in September, the HSBC PMI showed, although at a slower rate then in August.
A competing index, China's official nonmanufacturing Purchasing Managers' Index, rose to a six-month high of 55.4 in September from 53.9 in August, a China Federation of Logistics and Purchasing statement showed Thursday.
The weakness in US dollar also supported the gains in yellow metal. The dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.15% to trade at 80.11, compared to the previous session’s high of 80.28.
Gold traders will be looking ahead to Wednesday’s minutes of the Fed’s most recent policy-setting meeting for further clues on the direction of U.S. monetary policy. The Fed took markets by surprise last month with a decision to keep its stimulus program on track, saying it wanted to see more evidence of a sustained economic recovery before tapering.
The central bank is scheduled to meet October 29-30 to review the economy and assess policy.
The World Bank lowered its outlook on Chinese GDP growth to 7.5%, down from 8.3% and below the 7.5% the International Monetary Fund previously forecast.
MCX December gold futures may open today’s session near Rs 29500 levels with resistance near Rs 29700 and support near Rs 29400 levels.
