Gold reaches the highest price since February

Otmane El Rhazi from The Bullion Desk.

Gold prices climbed for the second consecutive day amid a weaker dollar, mixed US data and growing consensus that the Federal Reserve won’t raise interst rates until the end of the year or later. 

Gold for June delivery on the Comex division of the New York Mercantile Exchange increased $7.0 to close at $1,225.2 per ounce. Trade ranged from $1,211.9 to $1,227.7. Earlier, the price touched $1,227.7, the highest price since February 16.

The dollar index was down 0.1 percent to 93.4990, while the euro was 0.4 percent stronger at $1.1394 against the dollar. However, some investors still caution buyers unless we break the current range.

“Precious metals found a decent bid yesterday spurred by some fairly weak (but in our view not too consequential) figures out of the states,” Triland Metal said. “That gold still remains contained within its $1175-1225 range should dispel any overzealous bullish sentiment.”

In US data, PPI month-over-month in April was down 0.4 percent, while forecasters pegged a positive 0.1 percent growth. Unemployment claims for the week were 264,000, below the estimates of 272,000. Lastly, April Core PPI month-over-month decreased 0.2 percent, as estimates predicting a 0.1 percent increase.

“The spate of rather subpar US data we have been seeing over the past few weeks is now prompting some head-scratching by Fed-watchers,” Ed Meir, analyst at INTL FCStone, said. “Not only is a June rate hike now off the table, but a September date also looks suspect, particularly if we do not see a meaningful rebound in the economy by then.”

While in US equities, the Dow Jones industrial average and S&P were both up one percent.

As for other precious metals, Comex silver for July delivery was up two cent to close at $17.465 per ounce. Trade ranged from $17.070 to $17.435. Platinum for July delivery on the Nymex rose $11.60 to $1,162.4 per ounce, while the most actively traded palladium contract was at $779.5, down $9.90.

Light sweet crude (WTI) oil futures on the Nymex were down $0.71 or 1.1 percent to $59.81 per barrel.

(Editing by Tom Jennemann)

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