Forexpros – Gold futures rose for a second day on Wednesday, trading at the highest level since early December as the U.S. dollar came under pressure amid hopes for an imminent debt restructuring agreement for Greece.
On the Comex division of the New York Mercantile Exchange, gold futures for April delivery traded at USD1,748.85 a troy ounce during early U.S. morning trade, gaining 0.49%.
It earlier rose by as much as 0.69% to trade at USD1,753.95 a troy ounce, the highest since December 8.
Futures were likely to find support at USD1,719.15 a troy ounce, the low of January 30 and resistance at USD1,760.35, the high from December 8.
Gold’s gains came as the euro pushed higher against the U.S. dollar, while the dollar index, which tracks the performance of the greenback against a basket of six other major currencies, was down 0.65% to trade at 78.91. It earlier fell to an eight-week low of 78.81.
Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
Meanwhile, a report showing that the U.S. private sector added fewer-than-expected jobs in January provided further support.
Payroll processing firm ADP said non-farm private employment rose by a seasonally adjusted 170,000 in January, falling short of expectations for an increase of 190,000. The previous month’s figure was revised down to a gain of 292,000 from a previously reported increase of 325,000.
The soft data underlined concerns over the outlook for the U.S. economic recovery and fuelled speculation the Federal Reserve would introduce further stimulus measures in the near-term to prop up the economy.
Last week, the Fed pushed back the timing of likely interest rate hike to mid-2014.
Meanwhile, euro-denominated gold futures were largely unchanged, after earlier rising to EUR1,325.95, the highest since September 19.
Greek newspaper Kathimerini reported that the head of the IMF mission to Athens said talks on a new loan program for the country will conclude within a matter of days.
Also supporting market sentiment were reports showing slowing contraction in euro zone manufacturing activity in January.
Elsewhere on the Comex, silver for March delivery surged 1.9% to trade at USD33.89 a troy ounce, while copper for March delivery gained 0.5% to trade at USD3.809 a pound.
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