SINGAPORE, Nov 27: Gold was trading in a narrow range below $1,250 an ounce on Wednesday, with strong U.S. housing data stoking fears the Federal Reserve would soon begin rolling back stimulus measures that burnish the metal’s appeal as a hedge against inflation.
FUNDAMENTALS
* Spot gold had ticked up 0.1 percent to $1,244.11 an ounce by 0012 GMT, after dropping 0.7 percent in the previous session.
* The metal, which hit a 4-1/2 month low of $1,227.34 earlier this week, is likely to fall further as physical demand has not picked up strongly enough to support prices.
* Permits for future U.S. Home construction marked a near 5-1/2 year-high in October and prices for single-family homes notched big gains in September, suggesting a run-up in mortgage interest rates has not derailed the housing recovery.
* The data releases on Tuesday were the latest signs of strength in the economy, which could prompt the U.S. Central bank to cut back its $85 billion in monthly bond purchases.
* Germany’s financial watchdog BaFin has started a probe into suspected manipulation of benchmark gold and silver prices by banks, the Wall Street Journal Deutschland website reported on Tuesday. The report also said that similar investigations were under way in the United States and Britain.
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MARKET NEWS
* Asian share markets got off to a stuttering start on Wednesday following an uninspiring performance by Wall Street, while the dollar was at one-week lows against a basket of major currencies.
(AGENCIES)
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