Gold climbed on Tuesday above the 1420 level and is trading at 1412.80 in the green this morning. Tensions over the conflict in Syria increased after a leading congressional member endorsed President Obama’s drive for congressional approval to for a limited strike against the Assad government. Gold prices settled higher on Tuesday amid stability in investment demand as holdings in SPDR Gold Trust remained steady at 921.03 tonnes for the fifth consecutive trading day. Some value buying also aided bullion prices. However, prices remained under pressure due to strength in the US dollar. The dollar traded 0.2 percent from a six-week high against the euro amid signs the U.S. economic recovery is gaining traction, adding to the case for the Federal Reserve to scale back stimulus this month. The US dollar is trading at 82.43 up 5 points this morning. Gold futures trimmed gains on Tuesday, coming off the highs of the session after data showed that manufacturing activity in the U.S. expanded at the fastest rate since April 2011 in August. Gold traders have closely been looking out for U.S. data reports recently to gauge if they will strengthen or weaken the case for the Federal Reserve to reduce its bond purchases. This week traders are watching the Bank of Japan, the Bank of England and the ECB for their decisions and evaluation of their economic situation. While the marquee event will be Friday’s nonfarm payroll release which will give guidance to the upcoming FOMC meeting.
Copper futures were higher on Tuesday, after stronger-than expected manufacturing data on Monday boosted the outlook for the global recovery. Copper is sensitive to the economic outlook because of its widespread uses in construction and manufacturing. Copper is trading at 3.292 easing by 21 points as the US dollar gained momentum. Manufacturing is poised to make a bigger contribution to the U.S. expansion after a factory barometer unexpectedly climbed in Aug to the highest level in more than two years. The ISM’s index rose to 55.7, from 55.4 a month earlier. Global manufacturing activity grew at its fastest pace in over two years in Aug as new orders. JPMorgan’s Global Manufacturing PMI rose to 51.7 in Aug from July’s 50.8. Construction spending in U.S. increased in July to the highest level in four years, propelled by gains in residential real estate. Outlays climbed 0.6% to $900.8 bn annual rate.
Silver eased by 25 cents today as industrial metals and precious metals dipped after yesterday’s climb. Silver is trading at 24.173. Yesterday silver prices climbed along with upside in base metals complex, spot silver prices gained around 0.2 percent in Tuesday’s trade. However, strength in the DX capped sharp gains in prices. The white metal touched an intra-day high of $24.47 and closed at $24.20 in yesterday’s trading session.