Monday 29 April 2013

Gold off to strong start in Asian trade

              Following a lackluster performance in the U.S. last Friday, gold futures started the week in solid fashion during Monday’s Asian session. 

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery rose 0.66% to USD1,463.15 per troy ounce in Asian trading Monday. Despite last Friday’s flat performance, gold futures gained 4.2% on the week. 


Gold prices were likely to find support at USD1,403.75 a troy ounce, the low from April 22 and near-term resistance at USD1,484.75, Friday’s high. 

Traders pushed gold higher amid some lethargic U.S. data points published early Friday. In U.S. economic news, the Commerce Department said U.S. GDP grew 2.5% in the first quarter, missing the consensus estimate of 3% growth. 

The Thomson Reuters/University of Michigan Survey of consumer confidence fell 2.8% to 76.4 in April. That reading is the same as April 2012. Economists expected a reading of 73.5. 

Two weeks ago, bullion plunged to a 27-month low, but futures have surged nearly 10% since then, buoyed by strong physical demand. The U.S. Mint has sold 208,500 troy ounces of gold coins so far in April, the highest since December 2009 and up more three-fold from the 62,000 troy ounces the Mint had sold in all of March. 

There have also been signs that investors in China and India, two of the world’s largest gold consumers, stepped into the market to take advantage of lower prices. 

Reports of central bank buying also benefitted sentiment. Russia, Turkey and Kazakhstan all added to their gold reserves in March, according to International Monetary Fund data released earlier in the week. 

Still, there is some doubt regarding the physical buying that has supported bullion in recent days will continue. Some traders believe Indian consumers merely bought gold in April that would have been purchased in May due to the price decline. Additionally, data from the U.S. Commodity Futures Trading Commission indicate net long positions on gold have fallen 25%. 

Meanwhile, Comex silver for May delivery jumped 0.93% to USD24.010 per ounce while copper for May delivery slid 0.74% to USD3.163 per ounce. - investing.com

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