IV:Gold trims losses after China PMI data, fading Syria fears weigh
Investing.com - Gold futures remained lower during European morning hours on Monday, albeit off the worse levels of the session, as the U.S. dollar weakened following the release of upbeat Chinese manufacturing data.
Gold futures tumbled 1.5% at the open after U.S. President Barack Obama delayed an imminent strike against Syria.
The precious metal rallied last week amid indications the U.S. was close to taking military action against Bashar al-Assad’s government.
On the Comex division of the New York Mercantile Exchange, gold futures for December delivery traded at USD1,393.40 a troy ounce during European morning hours, down 0.2%.
Prices fell by as much as 1.5% earlier in the session to hit a low of USD1,374.10 a troy ounce, the weakest level since August 23.
The December contract settled 1.2% lower at USD1,396.10 a troy ounce on Friday.
Gold futures were likely to find support at USD1,368.40 a troy ounce, the low from August 23 and near-term resistance at USD1,411.10, the high from August 30.
Data released earlier showed that China’s final HSBC Purchasing Managers Index inched up to a four-month high of 50.1 in August, unchanged from a preliminary reading and up from 47.7 in July.
The upbeat data was published one day after a government report showed that China’s manufacturing purchasing managers' index climbed to a 16-month high of 51.0 in August from 50.3 in July, beating forecasts for 50.6.
A reading above 50.0 indicates industry expansion, below indicates contraction.
Meanwhile, fading expectations for imminent U.S. military action against Syria also weighed after President Obama said Friday that he will seek approval from the U.S. Congress before ordering a military strike against Syria.
A decision is not expected before September 9, when U.S. lawmakers return to work.
U.S. Secretary of State John Kerry said last week that the U.S. would punish Syrian President Bashar al-Assad for a "brutal and flagrant" chemical weapons attack that killed nearly 1,500 people in Damascus.
Gold prices surged to a three-and-a-half month high of USD1,433.50 a troy ounce last Wednesday as safe-haven buying picked up amid growing speculation the U.S. was moving closer to taking military action against Syria’s government.
Elsewhere on the Comex, silver for December delivery rallied 3.05% to trade at USD24.23 a troy ounce, while copper for December delivery surged 1.9% to trade at USD3.294 a pound.
Trading volumes were expected to remain light on Monday, with U.S. markets closed for the Labor Day holiday. Regular trading on Comex will resume on Tuesday following Monday’s Labor Day holiday.
