Having opened the day at 1,329.13, the price of gold dipped to just below 1,324.15 before reversing, taking out the day’s open and broke its hourly chart, 50-period moving average to reach daily highs at 1,336.09.
The day’s action is a somewhat muted response to a host of U.S. economic data, starting with January’s durable goods data. The release came out better than expected, showing a 1% decline against a forecast 1.7% decline. The figure was better than expected, which boosted the dollar in the short term, but the overarching decline led to an increase in gold futures (April delivery), which rose $6.70 to $1,334.70.
The second release of note was the initial jobless claims figure, which came out as 348,000, a 13,000 increase over the forecast 335,000. This release likely also contributed to the small increase in the price of spot gold and the larger increase in the April futures.
Also driving up prices of the precious metal is the ongoing conflict in Ukraine. Investors have been wary for some time now, and many reallocating to risk-off assets to reduce exposure to the conflict. Traditionally, this reallocation starts with U.S Dollar buying and then carries over to gold buying, which suggests that the longer the Eastern European situation goes on, the more the price of gold will increase.
The precious metal is currently trading just shy of 1,350.00, which historically has been a key level in the spot market. Price reversed from this on numerous occasions throughout 2013, so expect some initial friction if the longer-term fundamental bullish bias is to play out. A correction could offer up discount buying opportunities around 1,310.00, which offered strong support during the middle of last week.
Elsewhere, natural gas futures suffered a decline off the back of the EIA weekly report, with spot prices currently trading at 4.514 per million British thermal units, 0.64% below the daily open.
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