Forexpros – Gold prices rose in U.S. trading Friday as traders stocked up on the precious metal on talk of expectations that central banks around the world are quietly making plans to inject liquidity into the global financial system to ensure credit access in case of a Greek exit from the eurozone.
Weak industrial output and confidence data out of the U.S. sent gold gaining as well.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded up 0.50% at USD1,627.65 a troy ounce.
Gold hit at a low of USD1,620.95 a troy ounce and a high of USD1,634.35 a troy ounce during the session.
Gold futures were likely to test support at USD1,610.55 a troy ounce, the low of June 14, and resistance at USD1,642.15, the high from June 6.
U.S. data and talk of global central bank plans to be prepared should Greece exit the eurozone drove gold’s traditional hedge, the dollar, down in U.S. trading.
Gold and the dollar often trade inversely of one another.
The Thomson Reuters/University of Michigan’s preliminary reading on the overall index on consumer sentiment fell to 74.1 in June from to 79.3 in May, Reuters reports.
The number fell short of a 77.5 reading predicted by a Reuters poll of economists.
Consumer spending drives 70 percent of the U.S. economy, and the disappointing numbers cemented some market expectations that the Federal Reserve will take steps soon to stimulate the economy, which would weaken the dollar.
The Federal Reserve, meanwhile, reported that industrial production, which includes output from the nation’s factories, mines and utilities, contracted 0.1% in May from 1.0% in April, whose figure was revised down from 1.1%.
Market forecasts called for a gain of 0.1%
Gold also gained on widespread market talk that central banks worldwide will take coordinated steps to shield the economy from a possible Greek exit from the eurozone, including liquidity injections, should the need arise.
Greece will hold elections on Sunday, and a strong showing among leftwing Syriza politicians could open the door to a Greek exit from the eurozone down the road.
Elsewhere on the Comex, silver for July delivery was up 0.99% and trading at USD28.688 a troy ounce, while copper for July delivery was up 1.80% and trading at USD3.358 a pound.
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