Gold futures surged to end at a more than three-week high Tuesday, on concerns over the geopolitical tensions brewing in Syria with increasing possibilities of a military invention by the U.S. and its allies in the civil war ravaged country. Additionally, concerns grew over the fiscal situation in the U.S. with the country approaching its debt ceiling in mid-October, unless Congress votes to increase it. The U.S. has accused the Syrian government of trying to cover up the chemical weapons attack in a rebel stronghold near Damascus last week. The Obama administration will be making an informed decision on how to respond after consulting with its allies and the Congress. Secretary of State John Kerry blamed the Assad regime for the attack against civilians, and said the use of chemical weapons was inexcusable and undeniable.
With some downbeat macroeconomic data out of the U.S., investors also anticipate the Federal Reserve to continue to maintain its quantitative easing measures intact for the near future, which is a positive for gold. Gold for December delivery, the most actively traded contract, surged $27.10 or 2 percent to close at $1,420.20 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.
Gold for December delivery scaled an intraday high of $1,424.00 and a low of $1,395.20 an ounce. Yesterday, gold settled marginally lower as the dollar trended higher against a basket of major currencies, even as investors pondered over some weaker than expected durable goods orders data from the U.S. for July. The soft data once again renewed hopes the Federal Reserve will maintain its bond-buying program, while traders awaited fresh triggers from this week’s macroeconomic news.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged at 920.13 tons. The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.16 on Tuesday, down from 81.39 late Monday in North American trade. The dollar scaled a high of 81.57 intraday and a low of 81.13.
The euro traded higher against the dollar at $1.3391 on Tuesday, as compared to $1.3369 late Monday in North America. The euro scaled a high of $1.3400 intraday and a low of $1.3324. In economic news from the U.S., a report released by Standard & Poor’s revealed that the S&P/Case-Shiller 20-City Composite Home Price Index rose by a seasonally adjusted 0.9 percent in June after rising by 1.0 percent in May. Economists had been expecting the index to show another 1.0 percent increase.
Separately, the Conference Board said its consumer confidence index edged up to 81.5 in August from an upwardly revised 81.0 in July. The increase came as a surprise to economists, who had expected the index to dip to 78.0 from the 80.3 originally reported for the previous month. From the eurozone, German business confidence improved more-than-expected to 107.5 in August, reports said citing survey results from the Ifo Institute. Economists had forecast the index to rise to 107 in August from the originally estimated level of 106.2 in July. Similarly, current assessment among survey participants climbed to 112 from 110.1. It was forecast to rise moderately to 111.

Source: RTT Staff Writer
Source:Bullion Bulletin