Gold futures inch up in rangebound trade

                 Gold futures inched higher in rangebound trade during European morning hours on Tuesday, as investors continued to speculate whether global central banks will continue to provide stimulus measures.

Expectations of monetary stimulus tend to benefit gold, as the precious metal is seen as a safe store of value and inflation hedge.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,582.10 a troy ounce during European morning trade, up 0.25% on the day.

Prices held in a tight USD5-trading range between USD1,579.00 a troy ounce, the daily low and a session high of USD1,583.50 a troy ounce.

Gold prices were likely to find support at USD1,554.80 a troy ounce, the low from February 21 and resistance at USD1,602.20, the high from February 28.

From a technical standpoint, the precious metal has traded in a tight range of roughly USD1,560 to USD1,586 a troy ounce since the beginning of March.

Gold’s investment appeal has weakened in recent weeks as market players opted for global equities over the precious metal, amid hopes the economic recovery in the U.S. is gaining momentum.

The Dow Jones Industrial Average moved further into unchartered territory Monday, closing at a fresh record high. Sentiment over the U.S. economy got a boost last week following the release of upbeat employment data on Friday.

The U.S. Department of Labor said the economy added 236,000 jobs in February, beating expectations for a 160,000 increase. However, January’s figure was revised down to an increase of 119,000 from a previously reported gain of 157,000.

The data also showed that the unemployment rate ticked down to 7.7% from 7.9% in January.

Market analysts noted that the still-high jobless rate will keep the Fed’s asset-purchase program in place for the indefinite future. The central bank previously stated that monetary policy will remain accommodative “at least as long” as the jobless rate remains above 6.5%.

Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank could bring quantitative easing, one of the biggest boosts to gold’s bull run, to an end this year.

While gold’s investment appeal has been dimmed in recent weeks, concerns over the global economic outlook remain after Chinese data released over the weekend showed consumer inflation accelerated sharply in February, while industrial production slowed to the lowest level since October 2009.

Fears over a possible economic impact from the U.S. sequestration spending cuts and last month's election deadlock in Italy also was likely to remain in focus.

Elsewhere on the Comex, silver for May delivery added 0.2% to trade at USD28.91 a troy ounce, while copper for May delivery declined 0.35% to trade at USD3.503 a pound.

Copper prices came under pressure amid concerns about the economic health of China, the world’s largest consumer of the industrial metal.

Courtesy : INVESTING.COM