Gold logs its first loss in three sessions
Bullions once again ended in a mixed mode on Monday, 27 January 2014. Gold futures on Monday logged their first loss in three sessions, but finished above the day's lows as a generally weaker U.S. stock market helped support demand for the precious metal. Traders awaited an upcoming two-day meeting of the Federal Open Market Committee that begins on Tuesday and are looking ahead to the week's U.S. economic data calendar, which includes reports on durable-goods orders and consumer confidence on Tuesday and manufacturing and consumer-sentiment figures on Friday.
Gold for February delivery shed 90 cents, or 0.1%, to settle at $1,263.40 an ounce on the Comex division of the New York Mercantile Exchange after earlier falling under $1,260. Last week, prices scored a 1% gain and ended Friday. Over the past five weeks, gold has climbed 5%.
March silver hung onto gains, rising nearly 3 cents, or 0.1%, to $19.79 an ounce following a 2.7% loss last week.
There is still some anxiety in the market place on Monday, as a few emerging market currencies are under stress, including the Argentine peso, the South African rand and Turkish lira. The beneficiaries of this nervousness have been the perceived safe-haven investment assets: gold and U.S. Treasuries. Asian and European stock markets sold off on Monday, following Wall Street's lead on Friday. Prompting the secondary currencies to sell off are concerns about a financial system liquidity problem that has developed in China, and following China's disappointing economic data released last week.
There are also worries in the market place early this week that the U.S. Federal Reserve will continue to reel in its easy-money policy this week, which ostensibly soaks up some liquidity in the world market place, starting with the periphery currencies. Tuesday and Wednesday the Federal Reserve's Open Market Committee (FOMC) meets to set its monetary policy. There is a general belief, albeit not a clear consensus, that the Fed will do another $10 billion tapering of its monthly bond-buying program, also called quantitative easing.
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In other overnight news, there was an upbeat German Ifo business confidence index report on Monday. The index hit its highest level in two and one-half years and continues a string of upbeat economic data coming out of the European Union.
Today's economic data at Wall Street was limited to the December New Home Sales, which fell 7.0% to 414,000 from a downwardly revised 445,000 (from 464,000) while the consensus pegged the reading at 457,000. Total sales in 2013 increased 16.3% to 428,000 from 368,000 in 2012. That was the most new homes sold since 485,000 sales registered in 2008.
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