Forexpros – bsp;Forexpros – Gold futures are flirting between positive and negative on Monday due to U.S. dollar strength triggered by euro zone debt fears.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1597.25 a troy ounce during mid U.S. trade giving back 0.04%.
It earlier hit a high of USD1603.45.
Gold futures were likely to find support at USD1593.19 and technical resistance exists at USD1598.29.
The U.S. dollar strength kept gold’s advance in check as nervous investors moved into the safe haven of the dollar instead of metals.
Supporting the gold bulls, VTB Capital’s analyst Andrey Kryuchenkov stated to Bloomberg, “Gold suffered from a renewed rush for dollar liquidity, but in the long run, its outlook remains solid. Accommodative monetary policy across the globe will continue to secure gold’s inflation hedge role.”
While on the bearish side, Scott Gardner from Verdmont Capital told Bloomberg, ” It will take some time for investors for regain confidence in gold as a crisis hedge given the magnitude of the recent shakeout.”
For much of the last year, investor’s typical reaction to bad news from Europe was to buy gold, as its boosts safe haven appeal of the precious metal, but that relationship has unraveled recently.
Instead, gold futures have moved largely in line with other commodities and risk assets over the past month, with investors preferring the relative safety of the U.S. dollar.
Elsewhere on the Comex, silver for March delivery fell 2.73% to trade at USD28.86 a troy ounce, while copper for March delivery gave back 0.65% to trade at USD3.31 a pound.
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