MW: Gold futures tap $1,600 after manufacturing data
Weak U.S. manufacturing data give the metal a boost
By Myra P. Saefong and Polya Lesova, MarketWatch
SAN FRANCISCO (MarketWatch) — Gold futures climbed Monday, briefly tapping $1,600 an ounce as the market found some safe-haven support from weaker-than-expected data on the U.S. manufacturing sector.
Gold for June delivery GCM3 +0.11% gained $1.80, or 0.1%, to $1,597.50 an ounce on the Comex division of the New York Mercantile Exchange.
It touched $1,600 immediately after the manufacturing data, though it traded just over that level overnight for an intraday high of $1,601.60.
Trading on Comex had been closed for Good Friday. Tracking the most-active contracts, gold futures rose 1.1% in March, but lost 4.8% for the first quarter.
Data on Monday showed that the pace of sales and production at U.S. manufacturers slowed in March. The Institute for Supply Management’s survey of senior executives fell to 51.3% from 54.2% in February. Economists polled by MarketWatch expected the index to hold steady.
For now, gold is finding support from the weak ISM manufacturing report, said Jeffrey Wright, managing director at Global Hunter Securities.
GHS believes prices will “hover” around the $1,600 level in anticipation of Friday’s U.S. employment report, he said.
“The rate of unemployment has now taken on greater significance,” with a target at 6.5%, as to when the Federal Open Market Committee curtails quantitative-easing measures, said Wright. “The gold market will be looking very closely at the substance of unemployment numbers.”
Among exchange-traded funds, the SPDR Gold Trust GLD +0.07% traded little changed, after posting a decline of 0.6% on Thursday. Last week marked the 10th anniversary of the world’s first gold-backed ETF AU:GOLD +0.81%
Gains for gold Monday also came as the U.S. dollar weakened. The dollar index DXY -0.41% , which measures the greenback’s performance against six other major currencies, dropped to 82.746 on Monday from 82.998 on Friday. Dollar weakness often provides support for prices of dollar-denominated commodities such as gold and oil.
But pre-tax-season selling may be a factor putting pressure on gold, said John Person, president of NationalFutures.com. Gold can be used as a source of cash in times of need, such as during tax season.
In other trading, May silver futures SIK3 -1.44% looked to extend their 1% loss from Thursday, falling 46 cents, or 1.6%, to $27.87 an ounce.
May copper HGK3 -0.91% slipped 4 cents, or 1.1%, to $3.37 a pound.
July platinum PLN3 +1.23% traded at $1,587.40 an ounce, up $12.80, or 0.8%, and June palladium PAM3 +1.39% tracked on $8.75, or 1.1%, to stand at $777 an ounce.
Myra Saefong is a MarketWatch reporter based in San Francisco. Follow her on Twitter @MktwSaefong.
Polya Lesova is MarketWatch's New York deputy bureau chief. Follow her on Twitter @PolyaLesova.
