Forexpros – Gold futures traded sharply higher Friday as Chinese monetary stimulus hopes boosted demand for the yellow metal..
On the Comex division of the New York Mercantile Exchange, Gold futures for August delivery traded at USD1593.25 a troy ounce climbing 1.79%.during early U.S. trade.
Gold was likely to find support at USD1554.55 and resistance at USD1601.25.
Moody’s slashed Italian government bond rating by two levels to Baa2 and reiterated that additional downgrades may be forthcoming.
Baa2 bond rating is two levels above junk bond status and one level higher than Spanish bonds.
However, Italy’s borrowing costs declined at a debt sales helping support the single currency.
Adding to the negative growth sentiment, China’s GDP expanded 7.6% last quarter from a year prior. This is down from an 8.1% increase the previous period and the 7.7% average analysts forecast.
In addition, China’s exports grew 11.3% last month down from 15.3% in May. While imports increased 6.3% compared with 12.7%.
This slowdown sparked speculation that the Chinese government would start monetary stimulus programs lifting gold higher.
Meanwhile, U.S. producer price inflation rose unexpectedly last month, official data showed on Friday.
In a report, U.S Bureau of Labor Statistics – Department of Labor said that U.S. PPI rose to a seasonally adjusted 0.1%, from -1.0% in the preceding month.
Analysts had expected U.S. PPI to fall -0.5% last month
US Dollar Index, which tracks the performance of the greenback versus a basket of six other major currencies, fell 0.34% to trade at USD83.50.
Elsewhere on the Comex, Silver for September delivery rose 0.84% to trade at USD27.388 a troy ounce while Copper for September delivery rose 1.64% to trade at USD3.471 a pound.
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