Gold backs off highs as dollar rises on Syrian tensions

Gold backs off highs as dollar rises on Syrian tensions

Submitted by caseyb23 on Thu, 08/29/2013 - 04:28

Gold backs off highs as dollar rises on Syrian tensions

Investing.com – Gold prices gave back earlier gains but remained in positive territory after investors sought out safe-haven dollar positions in advance of possible U.S.-led attacks on Syria.

Gold and the dollar tend to trade inversely from one another.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,421.70 during U.S. afternoon hours, up 0.11%.

Gold prices hit a session low of USD1,413.30 a troy ounce and high of USD1,433.50 a troy ounce.

Gold futures were likely to find support at USD1,389.50 a troy ounce, Monday's low, and resistance at USD1,444.15, the high from May 14.

The December contract settled up 1.95% at USD1,420.20 a troy ounce on Tuesday.

Gold prices shot up on Tuesday amid concerns that the U.S. may launch limited missile strikes against Syria for its alleged use of chemical weapons in its civil war despite warnings to avoid such actions from Russia, China and Iran.

By Wednesday, however, the dollar rose after the U.S. and its allies were preparing an organized and coordinated attack against Syria, which bolstered the currency's safe-haven appeal.

British Prime Minister David Cameron drafted a United Nations resolution condemning the use of chemical weapons in Syria while "authorizing necessary measures to protect civilians" on Wednesday.�

The U.N. Security Council was studying draft language, and with a veto possibly to come from Syrian allies Russia and China resulting in a deadlock, U.S. and U.K. policymakers may look beyond diplomatic deadlocks and seek ways to justify military strikes without a U.N. mandate.

Housing data in the U.S. took a back seat to geopolitical tensions and met muted market response.

The National Association of Realtors reported earlier that U.S. pending home sales fell 1.3% in July, more than consensus forecasts for a 0.5% fall after a 0.4% loss in June.

Softer-than-expected U.S. economic indicators tend to keep expectations going that the Federal Reserve will begin tapering dollar-weakening stimulus measures later rather than sooner, which normally boosts gold.

Elsewhere on the Comex, silver for December delivery was down 0.92% at USD24.473 a troy ounce, while copper for September delivery was down 0.73% and trading at USD3.311 a pound.