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Gold up on weaker U.S. data

Xinhua, October 28, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Thursday in the wake of weaker U.S. economic data.

The most active gold contract for December delivery rose 2.9 U.S. dollars, or 0.23 percent, to settle at 1,269.50 dollars per ounce.

Gold was given support as a report released by the U.S. Department of Commerce showed core capital goods decreasing by a worse-than-expected 1.2 percent during the month of September, and durable goods orders decreasing by 0.1 percent during the month.

Analysts note that the durable goods orders figure is on the lower end of the consensus range, but still surprised most investors as the consensus was for a growth of 0.2 percent. This report drove investors to gold' s safe haven properties.

The precious metal was prevented from rising further as the U.S. Dollar Index rose by 0.28 percent to 98.90 as of 1800 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

Another positive for U.S. economic data kept a cap on gold. The pending home sales index, which rose by a slightly better-than-expected 1.5 percent during the month of September. Analysts note strength in the South of the U.S. and in the West of the U.S., with the west showing a 4.7 percent increase.

Despite the weaker durable goods orders, analysts believe long-term investors are more focused on the strength in home sales, increasing expectations for the Fed to raise rates from 0.50 to 0.75 during the December FOMC meeting.

According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 9 percent for the November 2016 meeting, and 79 percent at the December meeting.

Silver for December delivery rose 1.3 cents, or 0.07 percent, to close at 17.639 dollars per ounce. Platinum for January delivery added 0.9 dollars, or 0.09 percent, to close at 964.90 dollars per ounce. Endit