Gold futures rallied on Monday as opportunist Asian investors hunted for bargains.
Gold for June delivery on the Comex division of the New York Mercantile Exchange was last up $15.30, or 1.2 percent, at $1,189.80 per ounce. Trade has ranged from $1,176.60 to $1,191.40.
“Speculative financial investors no doubt triggered the price slide [last week],” Commerzbank noted. “[But now] physical demand in Asia appears to be picking up again at the currently lower prices. Traders in Shanghai are reporting physical premiums of $3-4 per troy ounce, as compared with $2 last week.”
In the wider-markets this morning, the dollar was 0.24 percent softer at 1.1172 against the dollar, while the Dow Jones Industrial average and S&P 500 were up 0.45 percent and 0.46 percent respectively.
European stocks advanced after Markit reported that eurozone PMI came in at 52.0 in April from 52.2 in March. Any reading over 50 indicates economic expansion. Germany’s DAX France’s CAC 40 rose 1.6 and 1.3 percent respectively.
“The eurozone manufacturing sector continued to grow in April, but the dip in the rate of expansion will serve to check recent optimism that the ECB’s quantitative easing programme has bought a guaranteed ticket to recovery for the region, “Chris Williamson, chief economist at Markit, said in a note.
Markit China PMI, meanwhile, remained below the neutral 50.0 value at 48.9 in April, down from 49.6 in March, signalling a deterioration in the health of the sector for the second successive month.
“China’s manufacturing sector had a weak start to the second quarter, with total new business declining at the quickest rate in a year while production stagnated,” Annabel Fiddes, Economist at Markit said. “Fewer new orders appeared to stem from weaker domestic demand, as new business from abroad showed tentative signs of improvement.”
Here in the US, several members of the Federal Reserve’s policy board are scheduled to speak today but the big even this week will be the non-farm payroll report. The labour market is expected to rebound sharply to 220,000 in April from an unusually weak 126,000 in March.
As for the other precious metals, Comex silver for July delivery were up 4.9 cents at $16.625 per ounce. Trade has ranged from $16.125 to $16.765.
Platinum futures for July delivery on the Nymex were up $11.90 at $1,141.60 per ounce, while the most-actively traded palladium contract was at $774.80 per ounce, up $1.05.
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