Gold price steady, shrugs off disappointing Chinese PMIs – BULLION MORNING

Otmane El Rhazi from The Bullion Desk.

Gold price was steady on Tuesday morning, ignoring disappointing Chinese PMI numbers and ahead of further data from around the world.

The spot gold price was last at $1,190/1,191 per ounce, up $7 on Monday’s close and around its highest in more than two weeks.

“The gold price rally has not been derailed by the Chinese PMI data, although prices have paused across the precious metals complex, but after some strong moves of late that is not such a bad thing,” FastMarkets William Adams said.

The China flash HSBC/Markit PMI fell to 49.2 in March, below the 50-point level that separates expansion from contraction. This compared with a forecast 50.5 and February’s final PMI of 50.7.

This reading is the latest in a string of disappointing data out of China that could “incite policy-makers to step up fiscal spending and carry out further cuts to the required reserve ratio and benchmark interest rates in order to prevent growth this year from slipping too far below their annual target,” MKS said in a note.

But the EU PMI came in at 51.9 against a forecast 51.6 and the German reading at 52.4 against an expected 51.5 although the French indicator was 48.2 versus 48.9. This afternoon, the US PMI will be issued as well as data on the HPI, new home sales and the Richmond manufacturing index.

In other markets, the dollar was little different at around 1.0955 against the euro but remains well below recent high amid the perception that the Federal Reserve will not now lift interest rates in the next few months; instead, an increase is seen later in the year.

The focus switches now to the US data, including PMI, CPI, HPI numbers and new home sales and the Richmond manufacturing index – these will be closely watched for any signs of improvement that may reignite speculation for higher interest rates from June.

Meanwhile, Greece said it will present a list of reforms to its eurozone partners by next Monday in order to unlock more funding and avert bankruptcy. Greek Prime Minister Alexis Tsipras met with German Chancellor Angela Merkel in Berlin on Monday to discuss the outline of the reforms.

In the other metals, silver was unchanged at $16.96/17.01 per ounce, platinum was last at $1,141/1,146, down $4, and palladium at $770/776 was also $4 lower.

“Palladium has been under considerable pressure of late, having been one of the stronger performers before that – it appears the market is reacting to reports that Russia’s central bank has agreed in principle to sell some of its palladium to a group of investors led by Norilsk,” Adams said.

(Editing by Mark Shaw)

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