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MTECHTIPS:-Gold holds on to modest gains after Empire State data
Gold held on to small gains on Monday, after data showed that the New York Federal Reserve’s index of manufacturing conditions improved at a weaker rate than expected in March, adding to concerns over the strength of the economy. The Federal Reserve Bank of New York said that its general business conditions index decreased to 6.9 this month from a reading of 7.8 in February. Analysts had expected the index to inch up to 8.0 in March. On the index, a reading above 0.0 indicates improving conditions, below indicates worsening conditions. On the Comex division of the New York Mercantile Exchange, gold futures for April delivery rose 80 cents, or 0.07%, to trade at $1,153.20 a troy ounce during U.S. morning hours. Prices held in a range between $1,152.80 and $1,163.20. Futures were likely to find support at $1,146.50, the low from March 11, and resistance at $1,169.60, the high from March 10. Meanwhile, the U.S. dollar took a breather from its recent rally ahead of the Federal Reserve’s two-day monetary policy meeting beginning on Tuesday. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell 0.4% to 100.31, after hitting an intraday peak of 100.71, a level last reached in April 2003. Gold prices often move inversely to the U.S. dollar, as the precious metal becomes less expensive for buyers using other currencies. Market participants were looking ahead to Wednesday’s Federal Reserve statement to see if it would drop its reference to being “patient” before raising rates. Traders would interpret such a move as a sign that the central bank could raise rates as early as its June monetary policy meeting.
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