Forexpros – Gold prices rose in Asian trading on Tuesday, ignoring the dollar’s gains and rebounding after falling on fears uncertainty surrounding the fate of the Spanish economy will send investors running to the dollar.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.19% at USD1,652.85 a troy ounce in Asian trading on Tuesday.
Gold futures were likely to test support at USD1633.05 a troy ounce, the low of April 10, and resistance at USD1,681.15, Thursday’s high.
Gold fell earlier on fears that default possbilities in Spain would spark demand for the metal’s traditional hedge, the dollar.
In Spain, yields spiked over 6 percent in government debt auctions, leaving many market observers hoping the European Central Bank will intervene in Spanish bond markets and ease credit conditions there.
Such monetary intervention often fuels demand for gold, although the yellow metal fell on fears that overall economic uncertainty would boost the dollar, which often trades inversely from the euro.
Meanwhile in the U.S., the Commerce Department reported that retail sales came in at a seasonally adjusted 0.8% gain in March, beating expectations for a 0.3% gain, according to the U.S. Commerce Department.
February’s figure was revised down just slightly to a 1.0% gain from a previously reported increase of 1.1%.
Core retail sales, which are stripped of automobile sales, rose by 0.8% last month, above expectations for a 0.6% gain, after rising by 0.9% in February.
The numbers put to rest some talk the Federal Reserve would move to stimulate the U.S. economy via quantitative easing, which are liquidity injections into the financial sector that often send gold rising as a hedge against inflation.
Still, the market felt gold had fallen enough by early Asian trading Tuesday, and investors snapped up nicely priced positions.
Elsewhere on the Comex, silver for May delivery was up 0.28% and trading at USD31.462 a troy ounce, while copper for May delivery was down 0.17% and trading at USD3.624 a pound.
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