MW: Gold edges higher after weak Empire State data
By William L. Watts and Michael Kitchen, MarketWatch
NEW YORK (MarketWatch) — Gold futures edged higher Tuesday after weaker-than-expected data on manufacturing activity in the New York area underlined concerns about the momentum of the economic recovery.
Gold was buoyed as stock index futures briefly turned negative after the New York Fed’s Empire State index, a gauge of manufacturing activity in the region, fell to 4.5 in February from 12.5 in January. Economists surveyed by MarketWatch had called for a reading of 9.0.
“Part of the decline is probably explained by harsh weather that has caused some problems for the factory sector. That said, the survey remains consistent with a moderate pace of activity in the U.S. factory sector,” said Annalisa Piazza, economist at Newedge Strategy.
April gold GCJ4 +1.52% was up $1.10, or 0.1%, in recent action at $1,319.70. The Comex was closed Monday for a U.S. holiday. In earlier electronic action, gold saw an intraday high of $1,332.40, according to FactSet data, and posted a 4.4% gain for the futures last week.
March silver SIH4 +6.03% , however, rose 17 cents, or 0.8%, from Friday’s levels to trade at $21.59 an ounce.
Gold’s earlier weakness appeared to be tied largely to profit-taking on the metal’s recent bounce, said Fawad Razaqzada, analyst at Forex.com. On a nearby basis, gold is up nearly 9.7% since the beginning of the year after tanking in 2013.
Meanwhile, the World Gold Council, in a report, said demand for gold fell 15% in 2013. The drop came in part because of large outflows from physically backed exchange-traded funds, or ETFs. It also reported that China had overtaken India as the world’s largest consumer of the metal.
“Until ETF investors return in large numbers, gold could struggle to make further headway,” Razaqzada said.
April platinum PLJ4 +0.55% fell $6, or 0.4%, to $1,424.10 an ounce, while March palladium PAH4 +0.44% lost $4.20, or 0.6%, to $733.40 an ounce.
March copper HGH4 +0.86% rose 1 cent to $3.28 a pound.
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William L. Watts is MarketWatch's senior markets writer, based in New York. Follow him on Twitter @wlwatts.
Michael Kitchen is Asia editor for MarketWatch and is based in Los Angeles. You can follow him on Twitter at @KitchenNews.
