Gold Hits 5-Day High, USD Weakens, China Supports
Singapore (Dec 10) Gold rose for the 2nd session running early Tuesday, boosted by growing speculation about stronger demand in China and a weaker USD.
The rebound in bullion markets is still evident Tuesday, as traders snapped last week’s selloff and took back losses triggered by Friday’s better-than-expected US employment data.
Bullion is set for the 1st annual drop in 13 yrs as market participants continue to believe the US Federal Reserve will soon begin paring its $85-b of monthly bond purchases amid fresh signs of improvement in US growth.
Spot Gold rose 0.49% to 1,246.48 as of 02:03 a EST, easing slightly after price hit the highest in 5 days at 1,247.06 earlier Tuesday, compared with Monday`s close at 1,240.35.
Data from Hong Kong customs Monday showed that October was China`s 2nd highest month for bullion imports. The world’s largest Gold producer imported 148 tons in October, the highest since March, when the country imported 224 tons.
Bullion Bulls turn their attention to the Fed’s 16-17 December FOMC meeting that could offer clues on the outlook for the bank`s stimulus, which has supported Gold prices as it boosts the metal`s inflation-hedge appeal.
Weakness in the USD helped ease the pressure on Gold prices, with the USD Index (USDIX) falling for the 2nd session hitting an intra-day low of 80.00.
St. Louis Fed President James Bullard on Monday supported market consensus of the bank’s tapering as early as December, where he said the Fed could slightly reduce its quantitative easing program this month in response to signs of an improved labor market.
Gold fell Friday after the US Department of Labor said the US economy added 203-K jobs in November, beating expectations for a 180-K increase and up from a downwardly revised 200-K rise in the previous month.
The intra-day bias remains sideways while bullion pushes towards 1,250 Key resistance mark, which should limit the upside move and force the price back lower within downtrend.
A break above that strong resistance mark would signal further correctional recovery with the context of the prevailing Bear channel.
