Gold keeps falling following Fed minutes

Gold futures, already hovering at their lowest levels since July, continued falling during Thursday’s Asian session following the release of minutes from the Federal Open Market Committee’s latest meeting released during Wednesday’s U.S. session. On the Comex division of the New York Mercantile Exchange, gold futures for April delivery slipped 0.68% to USD1,567.30 per troy ounce in Asian trading Thursday. Gold futures were likely to test support USD1,562.45 a troy ounce, the from July 23, 2012, and resistance at USD1,618.70, Monday's high. Gold was following in advance of the FOMC minutes and plummeted after the minutes showed the Fed may start easing or outright halt its bond-buying activities before originally planned. While there is no guarantee that will happen in the near-term,
the mere hint the Fed is preparing to wind its easing program sent traders scurrying out of riskier assets. Gold was punished in the flight to safety because the that flight meant landing with the U.S. dollar. Monetary stimulus tools tend to weaken the dollar, which trades inversely from gold. Mixed data points released in the U.S. Wednesday also weighed on gold. In U.S. economic news, the Labor Department said its producer price index for January rose 0.2% after falling 0.3% in December. For the 12 months ending in January, wholesale prices were up 1.4% after a 1.3% increase in December. The Commerce Department said housing starts fell 8.5% in January after jumping 15.7% in December. New home construction declined to a seasonally adjusted annual rate of 890,000 last month from 973,000 in December. Importantly, gold futures have made what is known as a "death cross," the technical scenario under which a security’s 50-day moving average falls below its 200-day line. As its name implies, the death cross is a bearish pattern and could lead to increased selling pressure on bullion. Elsewhere, Comex silver for March delivery fell 0.23% to USD28.557 while copper for March delivery fell 0.08% to USD3.596.

For MCX COMMODITY FREE TIPS CLICK MCX FREE TIPS

Courtesy: Investing.com