Prices were boosted on some weak U.S. economic data
Bullion prices ended higher on Tuesday, 25 February 2014. Gold prices ended the U.S. day session firmer and near the daily high on Tuesday. Prices scored another four-month high and were boosted in part on some weak U.S. economic data released Tuesday morning. Geopolitical concerns, particularly in Ukraine, as well as expectations for weak economic data have also contributed to gold's recent strength. Prices for the most-active contract have risen in 13 out of the previous 15 sessions.
On Tuesday, gold for April delivery tacked on $4.70, or 0.4%, to settle at $1,342.70 an ounce on the Comex division of the New York Mercantile Exchange. Prices reversed modest losses that had them trading around $1,337.50 shortly before the consumer-sentiment report. A day earlier, gold jumped more than 1% to settle at $1,338 an ounce.
March silver settled down nearly 9 cents, or 0.4%, to $21.96 an ounce after Monday's 1.2% gain.
Gold and silver traders were looking for some direction from U.S. economic data released Tuesday, highlighted by the consumer confidence index. That index as well as the S&P/Case-Shiller home price index and the Richmond Fed business survey all came in on the weak side of market expectations. That gave a lift to the gold market on notions recent downbeat U.S. economic data will make it harder for the U.S. Federal Reserve to keep backing off on its monthly bond-buying program (quantitative easing). The past few years of very easy U.S. monetary policy have been a bullish underlying factor for the precious metals and all raw commodities, due to the potential for inflationary price pressures.
The Conference Board's Consumer Confidence Index slipped to 78.1 in February from a downwardly revised 79.4 (from 80.7) while the consensus pegged the index at 80.8. The December Housing Price Index from the FHFA increased 0.8%, which followed an uptick of 0.1% observed in November. The Case-Shiller 20-city Home Price Index for December rose 13.4% while a 13.6% increase had been expected. This followed the November increase of 13.7%.
The Ukrainian civil unrest remains a significant geopolitical factor for the market place. The Ukrainian developments and some civil unrest and violence in Thailand recently have prompted increased safe-haven demand for gold.
In overnight news, China's stock markets were pressured by news the China central bank drained over 100 billion yuan from the Chinese financial system. The move by the Peoples Bank of China did not have much of an impact on world markets.
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