Commodity News
HeadLine : Gold prices rebound in early Asia with Chinese New Year demand eyed
Date : Jan 30 2015
Gold prices rebounded slightly in Asia Friday on physical demand prospects ahead of the Chinese New Year holidays in February with the dollar also slightly weaker.

On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 0.15% to $1,259.20 a troy ounce in early Asia, while silver for March delivery traded at 17.000 a troy ounce, up 0.34%.

Elsewhere in metals trading, copper for March delivery eased 0.12% to $2.455 a pound. The March contract hit a five-year low of $2.419 on Monday.

The red metal is down approximately 11.5% so far in January as concerns over the global economic outlook and the impact on future demand prospects dampened the appeal of the commodity.

Overnight, gold fell to a one-week low on Thursday, after data showed that the number of people who filed for unemployment assistance in the U.S. last week fell to the lowest level since 2000, fuelling optimism over the strength of the labor market.

The U.S. Department of Labor said the number of individuals filing for initial jobless benefits decreased by 43,000 to 265,000 last week. Analysts had expected initial jobless claims to decline by 8,000 to 300,000 last week.

The upbeat data added to optimism over the strength of the economy and supported expectations that the Federal Reserve will begin to raise rates sooner than previously thought.

The U.S. central bank upgraded its assessment of the economy and the labor market on Wednesday, leaving it on track to raise rates in the second half of this year.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.1% to 94.95, holding well below last Friday’s more than 11-year high of 95.77.

A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.

Greek borrowing costs continued to climb on Thursday, with the yield on 10-Year government bonds rising above 11%, the highest level since July 2013. Ahead of the election, the 10-year yield was below 9%.
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