Gold prices fell in the US after surging over the past two days after world equity markets rose and the dollar found support ahead of a quiet day for data.
Gold for June delivery on the Comex division of the New York Mercantile Exchange declined $9.60 to $1,215.60 per ounce. Trade has ranged from $1,210.60 to $1,221.70 – the metal had hit $1,227.7 on Thursday, its highest since February 16.
The dollar has reversed after dropping to its lowest in three months yesterday, with the euro 0.7 percent softer at 1.1332 against the dollar.
“Right now, we are seeing more weakness in the metals group in a fairly quiet news day,” INTL FCStone analyst Ed Meir said. “[The dollar's] bounce may explain the downward pressure we are seeing on a host of other commodity complexes outside of metals, including oil and gold.”
In the only major data for the morning, the US Empire State manufacturing index at 3.1 was worse than the expected 5.1 but still an improvement on the previous month’s reading.
“The downward trend in the data from a reading of 10 at the start of the year suggests manufacturing is suffering, which comes as no surprise considering the overall strength of the dollar,” William Adams, head of research at FastMarkets, said.
Industrial production, capacity utilisation and consumer sentiment numbers are due later – these should provide clues on whether or not the perceived first-quarter slowdown in the US economy has continued into the second quarter.
Should consumer sentiment figures in particular reflect the downturn in retail sales data earlier in the week, gold might once again push back towards three-month highs should the dollar bear the brunt.
In data released earlier, Chinese foreign direct investment was 10.4 percent and Japanese consumer confidence slipped to 41.5.
In US equities, the Dow Jones industrial average and S&P are both up 1.1 percent, while Germany’s DAX and France’s CAC-40 gained 0.1 and 0.3 percent respectively.
In the other precious metals, Comex silver for July delivery was up three cents at $17.495 per ounce. Trade has ranged from to $17.205 to $17.520. Platinum for July delivery on the Nymex was unchanged at $1,163 per ounce, while the most actively traded palladium contract was at $785.65, up $6.15.
Light sweet crude (WTI) oil futures on the Nymex were down $0.85 or 1.4 percent to 59.98 per barrel.
(Additional reporting by Ian Walker, editing by Mark Shaw)
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