Forexpros – Gold futures ended Friday’s session little changed, as prices remained underpinned by expectations that central banks around the world would soon announce fresh stimulus measures to help spur weak global growth.
On the Comex division of the New York Mercantile Exchange, gold futures for October delivery settled at USD1,615.75 a troy ounce by close of trade on Friday. On the week, gold futures shed a modest 0.3%.
Gold futures were likely to find near-term support at USD1,590.25 a troy ounce, the low from August 15 and resistance at USD1,626.05, the high from August 13.
Gold prices have been stuck in a narrow trading range since the beginning of August, as market participants await further clues over the timing of fresh stimulus measures to boost cooling global growth.
Data on Friday showed that the University of Michigan’s consumer sentiment index for August hit its highest level in three months, coming in at 73.6 from 72.3 in July and outstripping forecasts for a reading of 72.4.
Meanwhile, the Conference Board reported that its index of leading indicators rose more-than-expected in July.
The data came after better-than-expected U.S. retail sales and industrial production data earlier in the week tempered expectations for another round of quantitative easing by the U.S. central bank.
But investors remained cautious after data also showed that a gauge of manufacturing activity in New York fell into contraction territory in August for the first time since October 2011, while manufacturing activity in the Philadelphia-region shrank for the fourth consecutive month.
Moves in the gold price this year have largely tracked shifting expectations as to whether the U.S. central bank would pump more money into the financial system.
Elsewhere, hopes for more stimulus measures from the European Central Bank mounted after German Chancellor Angela Merkel said Germany was “in line” with the ECB on defending the single currency, fuelling expectations that the central bank will soon act to lower Spanish and Italian borrowing costs.
Gold prices also drew support from ongoing expectations of near-term easing in China.
Chinese Premier Wen Jiabao said earlier in the week that slowing inflation provides “growing room for monetary policy operation” to spur growth in the world’s second largest economy.
The remarks added to ongoing speculation policy makers in Beijing will cut banks’ reserve requirements or benchmark interest rates again after inflation cooled to a 30-month low in July.
The People’s Bank of China has lowered both twice so far this year in an effort to boost lending and stimulate growth.
Expectations of monetary stimulus tend to benefit gold, as the yellow metal is seen as a safe store of value and inflation hedge.
Gold traders are already beginning to focus on an annual meeting of economists and central bankers in Jackson Hole, Wyoming, at the end of August.
Policy meetings by the ECB and the Fed in early-September are also in focus.
Gold gained as much as 15% earlier this year to hit USD1,790 an ounce after the Fed said in January it would keep interest rates near zero until at least late 2014 and indicated that it could introduce a fresh round of asset-purchases.
However, prices have lost almost 10% since late February, as the Fed failed to deliver more easing and amid concerns over the euro zone’s deepening debt crisis, which has fueled demand for the precious metal’s hedge, the greenback.
Elsewhere on the Comex, silver for September delivery settled at USD28.01 a troy ounce by close of trade on Friday, easing down 0.15% on the week.
Meanwhile, copper for September delivery gained 0.4% over the week to settle at USD3.416 a pound.
In the week ahead, market participants will be awaiting Wednesday’s minutes of the Federal Reserve’s August meeting for any indications on the future possible direction of monetary policy.
The U.S. is also to release closely watched reports on the housing sector and manufacturing production.
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