Forexpros – Gold futures edged lower on Monday, after comments by Italian Prime Minister Mario Monti curbed risk appetite, lending support to the U.S. dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,605.25 a troy ounce during European morning trade, slipping 0.12%.
Gold futures were likely to test support at USD1,585.48 a troy ounce, Friday’s low and resistance at USD1,618.35, the high of August 1.
In an interview with German magazine Der Spiegel, Monti said tensions within the euro zone” bear the traits of a psychological dissolution of Europe,” and added that Europe “must work hard to contain it.”
The comments came after the European Central Bank indicated Thursday that it may restart its bond buying program, to help lower Spanish and Italian borrowing costs.
But investors remained wary amid concerns over how effective the ECB’s new bond buying program would be, in the light of differences from the bank’s existing scheme.
Risk appetite remained supported following Friday’s data showing that the U.S. economy added 163,000 jobs in July, the biggest increase since February and outstripping expectations for an increase of 100,000.
However, the U.S. unemployment rate unexpectedly ticked up to 8.3%, from 8.2% in the preceding month, keeping alive speculation over the possibility of further monetary stimulus from the Federal Reserve.
Gold and the dollar trade inversely, and talk the Fed is considering more easing can weaken the greenback and drive investors to buy the precious metal.
Elsewhere on the Comex, silver for September delivery was down 0.79% to trade at USD27.580 a troy ounce, while copper for September delivery fell 0.53% to USD3.350 a pound.
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