Spot gold prices are trading modestly higher Tuesday after some bleak U.S. manufacturing data helped rekindle hopes for some more monetary easing by central banks to support recovery. Gold prices have tentatively edged their way back above $1600 a troy ounce during Asian traded hours this morning, after meeting some selling pressure at $1601 during Monday’s session upon the release of some grim U.S. manufacturing data, which shrank in June for the first time in nearly three years. Gold prices still remain a little contained as market participants deem it unlikely that the Federal Reserve will embark on any quantitative easing (QE) so soon after the extension of Operation Twist, unless US data is seen to be worsening at an alarming rate of knots. Volatility in gold has eased a little as investors reassess the EU plan that was unleashed on the market last Friday. Gold prices are likely to remain on a more rangebound basis until the release of this week’s U.S. non-farm payrolls report, due Friday, where market participants will be looking for a clearer picture regarding the stance of the Fed.
EasyForexNews Research Team