Daily market Review - 12/31/2013

Gold prices edged lower in quiet trading on Tuesday as investors avoided the metal on the likelihood it will close 2013 with its deepest plunge in over three decades.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,202.60 a troy ounce during U.S. trading, down 0.10%. Gold prices traded in a range between USD1,81.90 a troy ounce and USD1,213.90 a troy ounce.

Futures were likely to find near-term support at USD1,181.90 a troy ounce, the earlier low, and resistance at USD1,213.90, the earlier high. The February contract settled 0.84% higher on Monday to end at USD1,203.80 a troy ounce.

The Conference Board reported earlier that its index of U.S. consumer confidence improved to 78.1 in December from 72.0 in November, beating consensus forecasts for a 76.0 reading.

Also Tuesday, the Standard & Poor's/Case-Shiller 20-city home price index rose at an annualized rate of 13.6% in October from a year earlier, the strongest pace since February of 2006 and above forecasts for an increase of 13.0%.

The data confirmed expectations for the Federal Reserve to continue winding down stimulus programs such as its USD75 billion in monthly bond purchases next year and let the economy stand on its own feet.

Fed bond purchases tend to weaken the dollar by driving down interest rates to spur recovery, thus bolstering gold's image as a hedge, though less monetary support can send gold falling.

The Fed has rolled out multiple rounds of bond purchase since the 2008 financial crisis, and the increasing likelihood that 2014 will see less and less monetary intervention has sent gold prices plunging this year.

Gold prices were set to finish 2013 contracting by about 29%, which would be the steepest decline for the yellow metal since 1981.

Investors largely shrugged off industry data revealing that the Chicago purchasing managers' index fell to a seasonally adjusted 59.1 this month from 63.0 in November. Analysts had expected the index to decline to 61.0 in December.

Elsewhere on the Comex, silver futures for March delivery dipped 1.11% to trade at USD19.398 a pound, while copper for March delivery was up 0.33% at 3.394.