Gold prices trade higher after US data miss but investors hold fire

Otmane El Rhazi from The Bullion Desk.

Gold prices edged higher on the Chicago Mercantile Exchange on soft data from the US and uncertainty about Greece.

Gold for June delivery on the Comex division of the New York Mercantile Exchange was last up $1.10 at $1,188 per ounce. Trade has ranged from $1,183.60 to $1,191.80.

With the Federal Open Market Committee (FOMC) to meet next week and eurozone ministers attending a summit today to discuss Greece’s possible default on its debt obligations, investors are keeping their powder dry until clearer pictures about economic health emerge.

US unemployment claims increased to 295,000 in April, beating the forecast 288,000. But a strong dollar – last at at 1.0737 against the euro – has capped further gains in precious metals.

“We attribute [yesterday's] price falls to the US dollar which recouped its early losses. What is more, the yield on ten-year US Treasuries rose considerably, thereby increasing the opportunity costs of holding gold,” Commerzbank said in a market report.

In other data, eurozone growth fell from March’s 11-month high amid signs of weakening expansion in France and Germany. The overall manufacturing PMI at 51.9 was short of the 52.6 consensus, as was the services number at 53.7 against forecasts of 54.5.

Earlier, the Chinese HSBC flash manufacturing PMI at 49.2 fell short of consensus at 49.5, while Japan slipped into a decline at 49.7 against expectations at 50.8.

According to industry officials, gold sales rose about 15 percent in rupee terms in India earlier this week during the Akshaya Tritiya festival, one of the busiest gold buying times of the year, MKS said.

In wider markets, Germany’s DAX and France’s CAC-40 were both down 1.1 and 0.9 percent respectively.

As for the other precious metals, Comex silver for May delivery was down two cents per ounce – trade has ranged from $15.74 to $15.92. Platinum for June delivery on the Nymex fell $1.80 to $1,127.90, while the most actively traded palladium contract was at $760.95, up $5.05.

In other markets, light sweet crude (WTI) futures were up $0.61 cents or 1.1 percent at $56.78 per barrel in the most active contract.

 

(Edited by Mark Shaw)

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