Forexpros – Gold futures extended gains on Tuesday, recouping some of the previous day’s sharp decline after revised data showing that the U.S. economy grew at a slower pace than initially estimated in the third quarter.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,700.05 a troy ounce during U.S. morning trade, rallying 1.28%.
It earlier rose by as much as 1.5% to trade at a daily high of USD1,702.15 a troy ounce.
The U.S. Commerce Department’s second estimate of third quarter gross domestic product showed that the economy grew at an annualized rate of 2.0%, down from a previous estimate of 2.5%.
Analysts had expected the second estimate of U.S. gross domestic product to remain unchanged at 2.5%.
The weak GDP figure fuelled speculation that the Federal Reserve could introduce further stimulus measures in the near-term to boost U.S. economic growth. Later in the day, the Fed was to publish the minutes of its November policy meeting.
Meanwhile, concerns over the debt crisis in the euro zone remained in focus after Spain’s Treasury sold EUR2.98 billion in three and six-month bonds in an auction earlier. Yields for the six-month bills rose to 5.2% from 3.3% at a similar auction in October.
It was the first Spanish debt auction since the conservative party’s sweeping election victory on Sunday, but investors have remained jittery as plans on how to cut the deficit and restore market confidence have remained unclear.
Weakness in the dollar also contributed to gold’s strength. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, dipped 0.1% to trade at 78.39.
Gold prices advanced during the Asian trading session, as Monday’s 2.7% plunge that left prices at a four-week low led to some bargain-buying from investors reluctant to bet that prices will fall further.
Elsewhere on the Comex, silver for December delivery surged 2.9% to trade at USD32.02 a troy ounce, while copper for December delivery jumped 1.25% to trade at USD3.344 a pound.
French lender Credit Agricole said earlier that, “Silver must hold at USD30 an ounce to prevent further significant weakness from developing.”
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