Rising crude oil prices and tensions between Iran and the West drove US gold futures higher early on Wednesday, but trading was cautious ahead of new crude inventory data and Federal Reserve Chairman Ben Bernanke's testimony to Congress.
At 10:16 am EDT (1416 GMT), most-active gold futures for April delivery on the COMEX division of the New York Mercantile Exchange were up $5 at $667.50 an ounce. They traded between $664.10 and $669.80, a session high early in electronic trading.
"We are following crude, basically tick to tick, with the tensions out in the Middle East with Iran," said Joseph Guzzardi at Sabin Commodities. "I think, if it wasn't for the crude, we would be trading a little bit lower here by now," he said. Guzzardi added that the precious metals market would take cues from the release of US oil inventory data by the Energy Information Administration at 10:30 am.
Oil climbed to near $65 a barrel on Wednesday, after a $5 spike to six-month highs overnight on a rumour, quickly dismissed by the United States, that a US naval vessel had clashed with Iran. The dollar slipped against the euro early, after a softer-than-expected US durable goods report bolstered chances of Federal Reserve interest rate cuts this year.
The report followed a string of weak US data in the past few sessions, including Tuesday's fall in consumer confidence and Monday's unexpected sharp fall in new home sales. James Moore, metals analyst at theBullionDesk.com, said in his daily research note that trading was likely to remain cautious ahead of option expiration and month- and quarter-end positioning, as well as Bernanke's remarks about the economy in his testimony to Congress.
The first notice day for the April gold contract is Friday, and investors needed to decide whether to roll April futures into the June contracts, creating additional buzz in the market. June gold futures will become the most-active contract on Thursday.
Moore said the combination of heightened tensions in the Middle East, higher oil prices, and a weakening dollar favoured an upside breakout for gold, despite technical indicators suggesting otherwise.
Investors await US economic indicators due this week, including gross domestic product data on Thursday and personal income on Friday. Traders said that the key economic gauges could influence gold futures. Spot gold was quoted at $666.80/7.30 an ounce, higher than the $662.90/3.90 quoted late Tuesday. London's afternoon gold fix was $666.75.
Silver tracked gold's gain. COMEX May silver was up 21.5 cents, or 1.6 percent, at $13.495 an ounce, trading between $13.330 and $13.545. Spot silver was quoted at $13.41/3.46, up from $13.25/3.28 late Tuesday. The London silver fix was $13.360.
NYMEX April platinum was up $7.20 at $1,249.20 an ounce. Spot platinum was quoted at $1,246.00/51.00. June palladium inched up 10 cents at $356.10 an ounce. Spot palladium was quoted at $352.00/57.00.
Comments
Comments are closed.