Gold Prices Stuck in Neutral
NEW YORK (
) --
traded sideways Monday as thinning volume and the Bank of Japan's attempt to control the yen's meteoric rise provided little direction.
Gold for December delivery settled up $1.30 to $1,239.20 an ounce at the Comex division of the New York Mercantile Exchange. The gold price Monday has traded as high as $1,240.40 and as low as $1,235. The
was adding 0.25% to $83.17 while
the euro fell 0.82% to $1.26 vs. the dollar
. The spot gold price today was lower by 90 cents, according to Kitco's gold index.
The Bank of Japan's decision to add another $117 billion to a loan program
for banks at a 0.1% interest rate did little for the gold price. The central bank is desperately trying to control the yen's rapid rise, which is crimping exports and curtailing the country's fledging economic recovery.
Typically, a surge of more yen in circulation would be a catalyst for gold as investors would buy the metal for protection against a devalued currency. But many experts believe Japan's moves weren't strong enough to control the yen's appreciation, which left gold relatively unchanged.
"$1,250 is
currently resistance ... and then probably down to about $1,230 level," says David Morgan, founder of Silver-Investor.com. "What we want to see ... is
for gold to break through the $1,250 level and remain above that ... normally when you have a resistance level it takes three times and the fourth time it usually
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breaks through."
Gold prices closed flat on Friday at $1,236 an ounce
despite a triple-digit rally in the
Dow Jones Industrial Average
as recent selling pressure has been met with solid buying. But in the absence of any big catalyst pushing gold substantially higher, many analysts are expecting neutral gold prices for the week.
"Gold is trading at resistance," says Chris Vermeulen, founder of thegoldandoilguy.com. "The intraday price action remains somewhat bullish to neutral for the time being."
Volume will be light for the rest of the week as many traders have taken off headed into the long holiday weekend in the U.S. Gold also will take its cue from the August unemployment report, which will be released Friday. Many experts expect markets, including gold, to stay in a wait-and-see mode until then. The unemployment rate is expected to rise to 9.6% due to a loss of 120,000 jobs, and the private sector is expected to add 44,000 positions.
The jobs number will probably be a mixed bag for gold as a better than expected number will prompt investors to buy riskier stocks and dump gold. A disappointing number, however, could lead a flight to safety into gold as well as the U.S. dollar and Treasuries but might also force investors to sell some gold to raise cash and cover losses in equities.
Many traders are looking at any price dips as an opportunity to buy gold.
Gold Prices Look To Jobs
closed up 3 cents to $19.07 while copper settled up 4 cents to $3.42.
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, were mixed.
New Gold
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was down 2.93% to $6.29 while
Gold Fields
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was flat at $14.29. Other gold stocks
Freeport McMoRan Copper & Gold
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were trading at $71.21 and $7.16, respectively.
--
Written by Alix Steel in New York.
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