Thursday 31 July 2014

Gold stays below $1,300 as US economic optimism dents demand

Gold held steady below $1,300 an ounce on Thursday, headed for its second monthly drop in three, as optimism over US economic growth curbed safe-haven appetite for the metal. 

The Federal Reserve on Wednesday upgraded its assessment of the US economy, although it also reaffirmed that it was in no rush to raise interest rates. 

Data on Wednesday also showed that the US economy has rebounded sharply, with the gross domestic product expanding at a 4 per cent annual rate in the second quarter, after shrinking at a revised 2.1 per cent pace in the first. 

Spot gold was flat at $1,294.45 an ounce by 0303 GMT, after dropping 0.3 per cent in the previous session. It is headed for a 2.5 per cent drop for the month. 

Spot gold was flat at $1,294.45 an ounce by 0303 GMT, after dropping 0.3 per cent in the previous session. It is headed for a 2.5 per cent drop for the month. 

Gold is poised to break support at $1,292 and fall further to $1,284, as indicated by its wave pattern and a Fibonacci projection analysis, according to Reuters technical analyst Wang Tao. 

Investors turned their attention to US nonfarm payrolls data due on Friday, while also keeping an eye on weekly jobless claims expected later on Thursday. US data is being watched closely by financial markets to gauge the strength of the world's largest economy and discern further clues to how the Fed may act. 

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