Gold ends higher but silver drops
Bullion metals ended the day mixed on Tuesday, 20 August 2013 at Comex with gold ending higher but silver ending lower. Gold futures finished higher Tuesday for their eighth gain in 10 sessions, with investors encouraged by prospects for seasonal demand from Asia as the market awaited this week's release of the latest U.S. Federal Reserve policy-meeting minutes.
Gold for December delivery tacked on $6.90, or 0.5%, to settle at $1,372.60 an ounce, recouping the $5.30 loss seen on Monday on the Comex division of the New York Mercantile Exchange.
September silver however, fell 9.5 cents, or 0.4%, to end at $23.07 an ounce, extending Monday's 16-cent decline.
Comex gold futures prices ended the U.S. day session moderately higher Tuesday, supported by some mild safe-haven demand and due to a lower U.S. dollar index.
The recent sharp drops in the Indian Rupee and the Indonesian Rupiah currencies is becoming an increasing concern to the market place. Worries are increasing about an Asian contagion situation that has in the past roiled markets worldwide. Rising interest rates in the major world economies have put pressure on the periphery currencies. The higher rates in the major economies have started to reverse the flows of investor monies that had been moving into the periphery country markets the past few years. An escalation in the Asian currency market sell off would likely prompt keener safe-haven demand for gold.
Key data points this week will be the Federal Reserve's FOMC minutes that are released on Wednesday and some Chinese economic data on Thursday. Traders will be looking at the minutes for some clarity on the near future path of U.S. monetary policy.
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Traders and investors are still watching the Egypt unrest, which continues to see violence between citizens and government militia. Any escalation in violence is likely to impact the market place, and could also prompt a rise in demand for safe-haven assets, including gold.
There was no economic data reported today, but tomorrow, the weekly MBA Mortgage Index will be released at 7:00 ET and July existing home sales will be reported at 10:00 ET. Lastly, the Federal Open Market Committee will release the minutes from its July meeting at 14:00 ET.
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