Gold holds above $1,400, weak US data helps
Singapore, August 27, 2013
Gold held above $1,400 an ounce on Tuesday, hovering near its highest in 11 weeks, supported by weak US data that traders hoped could stymie the US Federal Reserve's plan to taper its stimulus measures this year.
Spot gold had fallen 0.1 per cent to $1,402.56 an ounce by 0007 GMT, while US gold gained about $9 to $1,402.40.
Orders for long-lasting US manufactured goods recorded their biggest drop in nearly a year in July and a gauge of planned business spending on capital goods also tumbled, casting a shadow over the economy early in the third quarter.
The report on Monday added to other data for July on industrial production, housing starts and new home sales that have suggested economic growth this quarter will probably not accelerate as much as economists had hoped.
Gold climbed about 0.6 per cent on Monday as traders believed the weak data could delay the Fed stimulus tapering, that economists had largely expected to start from next month.
Gold's break above $1,400 an ounce on Monday for the first time since June 7, and a bullish "cup and handle" chart pattern, suggest more gains are in store for the precious metal which may have bottomed out two months ago, technical analysts said.
India is considering asking gold traders to produce a proof of payment for their jewellery exports, trade body officials said on Monday, a move which may tighten supplies in the world's top bullion buyer.
The Obama administration warned Congress that the United States could run out of money to pay its bills soon after mid-October if lawmakers do not move swiftly to raise a limit on government borrowing. - Reuters