Gold continued to climb higher on Monday afternoon as disappointing US data weighed on the dollar.
The spot gold price remained above the psychologically important $1,100 per ounce level – last at $1,118.4/1,118.8, up $3.60 on Friday’s close. Trade has ranged from $1,114.0 to $1,122.9 so far today.
In today’s data from the US, empire state manufacturing index missed the mark at -14.9, well below the 5.0 forecast and its weakest since 2009, while the NAHB housing market index also disappointed at 61.
“The Empire State Manufacturing Index was far below market expectations for August. Market participants are likely to reassess negatively their views about the timing and the speed of the US monetary policy normalisation,” Boris Mikanikrezai, FastMarkets analyst, said.
“Accordingly, the US dollar is weakening, which seems to provide some support to metals, especially the precious metals complex,” he added.
Elsewhere, Japan announced its second quarter preliminary quarter-on-quarter GDP at -0.4 percent, a decline from the previous quarter’s one percent growth.
Out of the eurozone, the region’s trade balance came in better than expected at 21.9 billion.
Meanwhile, the net long fund position (NLFP) in gold increased by 2,542 contracts, or nine percent, to 32,442 from 29,900 contracts in the week ending August 11, according to the latest CFTC statistics.
The increase in the net length for the second consecutive week was driven by long accumulation – up 2,986 contracts- that was slightly counterbalanced by a small increase in short positions of 444 contracts. The net length is down about 72 percent in the year-to-date.
In the other precious metals, silver was little changed at $15.31/15.36. Platinum at $993/998 was $4 higher and palladium at $613/618 was down $2.
(Editing by Archie Hunter)
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