Forexpros – Gold prices rose Friday, reversing earlier losses as investors snapped up the precious metal that initially fell on news that European leaders were making progress to tackling their debt issues, which had firmed demand for gold’s traditional hedge: paper currencies.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,717.65 a troy ounce during Asian trading, rising 0.25% and slightly off from a session high of 1,727.95 and above a previous low of 1707.45.
Gold futures were likely to find short-term support at USD1,706.05 a troy ounce, the low of December 6 and resistance at USD1,760.35, Thursday’s peak.
In Europe on Friday, European Union nations agreed to terms of enforcing rules that punish running up deficits via a new treaty, save the United Kingdom, which doesn’t use the euro and argued summit proposals such as financial transaction taxes would hurt its markets.
European leaders also agreed to allocate 200 billion euros to the International Monetary Fund to help bolster European assistance funds.
On top of that, policymakers will have at their discretion funds from a 500 billion euro European Stability Mechanism on top of an existing but temporary 440 billion euro European Financial Stability Facility to prop up economies that run into trouble.
While uncertainty still persist as to turning proposals into reality, currency markets rose on the news, which sent gold falling earlier.
Elsewhere on the Comex, silver for March delivery was up 2.05% to trade at USD32.18 a troy ounce, while copper for March was up 1.61% at USD3.557 a pound.
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