Gold futures advance in early Asian trade

By ForexMansion.com

Forexpros –

Forexpros – Gold futures moved higher in Asian trade Friday, bouncing back from a four-day low after the Federal Reserve painted a bleak picture of the U.S. economy.

On the Comex division of the New York Mercantile Exchange, gold futures for October delivery traded at USD1,742.35 a troy ounce during early Asian trade, up 0.17%, after hitting a low of USDS1,735.25.

On Thursday, the U.S. Federal Reserve said that it foresaw “significant downside risks” in the U.S. economy at the conclusion of its Federal Open Market Committee's policy meeting.

The Fed's decision to launch a USD400 billion “Operation Twist”, a combination of buying and selling of short and long term Treasuries, failed to impress investors hoping for a liquidity boost to the ailing U.S. economy.

Meanwhile, HSBC's preliminary China Manufacturing Purchasing Index fell to a two-month low in the month of September.

According to HSBC figures released Thursday, the preliminary PMI for the month fell to 49.4 from 49.9 in August. The final version of the HSBC PMI was due out September 30.

Resource demand in China, among the world's largest metal consumers, is closely monitored by dealers wary of any slowdown in the country's economy.

European shares plummeted in Thursday trade, with France's CAC 40 sinking 5.25% to 2,781.68, Britain's FTSE 100 sank 4.67% to 5,041.61, and Germany's DAX surrendered 4.96% to end the session at 5,164.21.

On Wall Street, as the Dow Jones Industrial Average dropped 3.51% to 10,733.83, the Nasdaq Composite Index fell 3.25% to 2,455.67, and the S&P 500 slumped 3.19% to close at 1,129.56.

Elsewhere on the Comex, silver for December delivery rose 1.28% to trade at USD36.44 a troy ounce, while copper for December delivery gained 0.98% to trade at USD3.465 a pound.

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