Metal extends gains ahead of U.S. ISM data
By Claudia Assis and Sara Sjolin, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures turned higher Monday, getting a boost from expectations of relatively positive U.S. manufacturing data and as concerns about the euro zone lingered following a manufacturing report that pointed to a 14th month of contraction.
Gold had traded lower during most of the Asian and European trading hours on Monday, as weak data out of Japan and China weighed on sentiment.
Gold futures for December delivery GCZ2 +0.96% gained $14.70, or 0.8%, to $1,787.60 an ounce on the Comex division of the New York Mercantile Exchange. A close around these levels would be gold’s highest since late February.
The sharp gains follow a Friday when gold clinched its biggest quarterly gain since 2010, rallying as a third round of quantitative easing in the U.S. fanned fears of inflation and currency depreciation in which gold thrives as a store of value.
Wall Street was hopeful that U.S. manufacturing data was not going to deteriorate, although point to a level just below expansion.
Economists surveyed by MarketWatch expect the Institute for Supply Management’s index gauging U.S. manufacturing to come in at 49.7 in September, compared to 49.6 in August. A figure of less than 50 indicates a contraction.
Markets are also awaiting a speech by U.S. Federal Reserve Chairman Ben Bernanke, where he’s expected to delve into more details about the latest round of monetary easing. U.S. stocks opened higher.
In Europe, a manufacturing gauge edged higher but still signaled a contraction for the 14th month. Markit points to 14th straight month of a contraction in Europe.
Data from China painted a bleak picture, as the official Purchasing Manager’s Index showed Chinese manufacturing contracted for a second straight month in September. See: China manufacturing contracts for second month.
The Bank of Japan’s quarterly Tankan survey showed business sentiment at large Japanese manufacturers deteriorated in September. See: Japan big manufacturers' sentiment worsens: Tankan.
“Overall we see prices being influenced by the tug of war between the bearish fundamentals and the bullish QE and stimulus,” said William Adams, head of research at FastMarket in a note.
Elsewhere in the metals complex, futures turned higher as well, tracking gold.
Silver for December delivery SIZ2 +1.56% was up 42 cents, or 1.2%, to $34.99 an ounce. Copper for the same month HGZ2 +0.68% rose 2 cents, or 0.6%, to $3.78 a pound.
January platinum PLF3 +0.99% rose $8.30, or 0.5%, to $1,677.60 an ounce, while palladium for December delivery PAZ2 +1.36% advanced $6.45, or 1%, to $647.25 an ounce.
Claudia Assis is a San Francisco-based reporter for MarketWatch.
Sara Sjolin is a MarketWatch reporter, based in London.
