Commodity Comex Gold Futures Tips

Comex Gold Futures for Dec delivery hit their weakest level in 7 weeks to $1698.7 before closing at $1701.6 for the first time since Sept. 7, with trading volume at 20% below its 30-day average. The US Federal Reserve stuck to its plan to keep stimulating growth until the job market improves offering no surprising moves in its policy statement. Comex Gold Prices hit a 2012 high on October 5 at $1,795.69 on market optimism after the Fed in September unveiled a third round of mortgage backed securities (MBS) buying to stimulate economic growth but the initial optimism on the Fed’s QE3 stimulus seems fading off. Gold Prices are once again trading under the levels where they were prior to the Federal Reserve’s third quantitative easing (QE3) announcement. Despite the absence of surprises, the outcome should give Gold Investors confidence of the Inflationary consequences of the unlimited QE3.

The Fed also repeated its vow to keep rates near zero until mid-2015 and its pledge to keep supporting growth while the recovery strengthens. It also made no change to its plan announced in September to buy $40 billion in Treasury & Mortgage-backed debt per month meant to push down long-term interest rates. The FOMC remains concerned that, without sufficient policy accommodation, economic growth might not be strong enough to generate sustained improvement in labor market conditions, reported Reuters. The Fed noted some areas of improvement, such as consumer spending, but said jobs growth remains slow and that the unemployment remains “elevated.” Even though the Fed’s latest round of mortgage-bond buyback should underpin Gold Prices in the long term, the US Federal Reserve cannot eliminate the risks for a global deflation. Gold Prices also appeared to have lost momentum after repeatedly failing to break the psychologically important $1,800 an ounce level thrice this year.