Strong US Data Weighs On Gold

Strong US Data Weighs On Gold
Strong US Data Weighs On Gold
Gold eased in the Asian session to trade at $1305.65 as it continues its slow downtrend. Gold is expected to break below 1300 if the results of the nonfarm payroll release today are above expectations. Gold fell a sixth day in the longest run of losses since May, heading for the first weekly decline in a month, as  U.S. economic data backed the case for less stimulus. Gold prices were higher Thursday mid-day as the first day of the month brings some larger, institutional investors back to the market and traders continue to adjust their expectations in the wake of the Federal Reserve’s policy statement. Gold for December delivery, the most actively traded contract, was recently up $6.40, or 0.5%, at $1,319.40 a troy ounce on the Comex division of the New York Mercantile Exchange but eased before the close to $1308.80 after the release of US data.

Yesterday data showed that US Unemployment Claims declined by 19,000 to 326,000 for the week ending on 26th July as against a rise of 345,000 in prior weeks. Manufacturing Purchasing Managers’ Index (PMI) rose by 0.5 point 53.7-mark in July from 53.2-level in June. The Institute for Supply Management (ISM) Manufacturing PMI increased by 4.5 points to 55.4 mark in July as compared to 50.9-level a month ago.  Strong US data helped push the US dollar to trade above a weekly high. The DX peaked close to 82.5.

SPDR gold holdings dropped by 0.7 percent in yesterday’s trade and stood tons lowest level since February 2009 exerted downside pressure on prices.  However, upbeat global markets cushioned sharp fall in the prices. The yellow metal touched an intra-day low of $1307.09 and closed at $1308.80 in the yesterday’s trading session.

Industrial metals prices rose to their highest level in a week yesterday following upbeat Chinese and European manufacturing data, and with a dovish Federal Reserve statement sparking hope of a delay in paring U.S. stimulus measures. Copper is trading at $3.15 down by 8 pips while silver eased below $20 to trade at $19.57.

On Thursday copper prices rallied to their highest level in nearly a week on Thursday after an unexpected increase in Chinese manufacturing activity and stronger euro-zone factory data bolstered the market’s demand outlook. Copper for September delivery, the most-actively traded contract, was recently up 6.75 cents, or 2.2%, at $3.1860 a pound on the Comex division of the New York Mercantile Exchange.

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