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MTECHTIPS:- Gold futures trade close to 2-week high on China stimulus move

Monday, March 2, 2015 6:39
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MTECHTIPS:- Gold futures trade close to 2-week high on China stimulus move

Gold traded just below a two-week high on Monday, as investors reacted to an interest rate cut in China over the weekend. Lower interest rates can give gold a lift, as it decreases the relative cost of holding on to the metal, which doesn’t offer investors any similar guaranteed payout.  On the Comex division of the New York Mercantile Exchange, gold futures for April delivery ticked up $4.60, or 0.38%, to trade at $1,217.70 a troy ounce during European morning hours after hitting an intraday high of $1,223.00, the most since February 17.  On Friday, gold rose $3.00, or 0.25%, to settle at $1,213.10. Futures were likely to find support at $1,204.10, the low from February 27, and near-term resistance at $1,236.70, the high from February 17. Meanwhile, silver futures for May delivery climbed 13.9 cents, or 0.84%, to trade at $16.69 a troy ounce.  The People’s Bank of China cut its benchmark interest rate by a quarter percentage point to 5.35% over the weekend in an effort to boost growth and stave off deflation in the world’s second largest economy.  It was the second rate cut in less than four months, indicating that Beijing is becoming more aggressive in supporting the economy as its momentum slows and deflation risks rise. Expectations of monetary stimulus tend to benefit gold, as the metal is seen as a safe store of value and inflation hedge.

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