Gold Sees Modest Gains as Bulls Continue to Show Resilience

(Kitco News) - Gold prices ended the U.S. day session firmer Tuesday. The key “outside markets” were in a bullish posture for the precious metals markets, as the U.S. dollar index was lower and crude oil prices were solidly higher. Gold prices continue to show resilience despite a lack of major, fresh bullish fundamental news in the marketplace. June Comex gold was last up $3.30 at $1,243.50 an ounce. July Comex silver was last up $0.101 at $17.16 an ounce.

Gold prices erased early-morning losses in the wake of a weaker-than-expected U.S. durable goods orders report issued at 8:30 a.m. eastern time. The downbeat data falls into the camp of the U.S. monetary policy doves, who do not want the Federal Reserve to raise interest rates any time soon. The weak durables report also put more selling pressure on the U.S. dollar index. The recent weaker greenback has been a bullish underlying factor for the precious metals and for the raw commodity sector.

Nymex crude oil prices were solidly higher in afternoon trading, and hovering above $44.00 a barrel. Crude prices are hovering near a 4.5-month high. The recent rally in the oil market is a clue prices have put in a major bottom, and also that the raw commodity sector has done the same.

Traders and investors are looking ahead to the meeting of the U.S. Federal Open Market Committee (FOMC), which began this morning and ends early Wednesday afternoon with a statement. No changes in U.S. monetary policy are expected at this meeting. However, the statement at the end of the meeting could provide clues on the timing of the next monetary policy move by the FOMC. FOMC statements have been significant markets-movers in the recent past.

The Bank of Japan holds its regular monetary policy meeting on Thursday. The BOJ is battling slow economic growth, price deflation and an appreciating yen on the world foreign exchange market.

Courtesy: Kitco News