Gold prices extended a near week-long rally as poor Chinese data upended US equity markets, while the dollar softened.
Gold for December delivery on the Comex division of the New York Mercantile exchange jumped $7.30 to settle at $1,139.80 per ounce. The contract has closed higher four consecutive sessions dating back to last week.
Overnight, China’s official purchasing managers’ index (PMI) fell to 49.7 in August from 50.0 in July, its weakest reading in three years.
Official numbers were no better for the Chinese service industry, falling to 53.4 in August from 53.9 in July.
Caixin final manufacturing PMI – a measure of smaller companies – and services PMI were both below the previous month at 47.3 and 51.5 respectively.
Global equity markets across the board shed previous gains with the Dow Jones industrial average and S&P last down 2.3 percent. The dollar was 0.8 percent weaker at $1.1299 against the euro.
“Gold is up…no doubt pushed higher by the across-the-board weakness we are seeing in equities,” Edward Meir, an analyst at INTL FCStone, said. “It seems that heading into September, the extreme volatility we saw in August will be very much with us.”
In key data figures, the US job’s report is scheduled for release on Friday. A positive number could reignite speculation of a September rate hike by the Federal Open Market Committee (FOMC).
“On balance, the importance of this week’s employment report is somewhat elevated given the lack of clearer signals from the recent Jackson Hole symposium – comments from Vice Chairman Fischer seemed to focus on trying to keep the Fed’s options open,” Joni Teves, analyst at UBS, said.
In US data, ISM manufacturing PMI in August was 51.1, below forecasts of 52.6. Construction spending month-over-month in July gained 0.7 percent, a tad under the 0.8 percent estimate.
Additionally, IBD/TIPP economic optimism in September was 42, missing the 47.3 mark. Final manufacturing PMI in August was 53, above the projection of 52.9.
As for other precious metals, Comex silver for December settlement was last up 3.9 cents to $14.625. Trade has ranged from $14.495 to $14.755.
Platinum for October delivery on the Nymex fell $1.70 to $1,008.80 per ounce, while the most-actively traded palladium contract was at $580.40, down $21.85.
(Editing by Tom Jennemann)
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