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Gold up on weaker U.S. data

Xinhua, September 2, 2016 Adjust font size:

Gold futures on the COMEX division of the New York Mercantile Exchange rose on Thursday on worse-than-expected U.S. data.

The most active gold contract for December delivery rose 5.7 U.S. dollars, or 0.43 percent, to settle at 1,317.1 dollars per ounce.

Gold was given support as the U.S.-based Institute for Supply Management released a report on Thursday showing its ISM Manufacturing Index falling to 49.4.

The worse-than-expected figure reflected a slowdown in the new orders component. Analysts note that the new orders component has been strong in recent months and that this came as a surprise to traders.

The ISM report made investors nervous ahead of the meeting of the U.S. Federal Reserve scheduled for later this month as previously the main influencing factor was supposed to be the big U.S. jobs report due on Friday. Traders believe that the Fed may raise rates from 0.50 to 0.75 during the December FOMC meeting.

According to the CME Group' s Fedwatch tool, the current implied probability of a hike from 0.50 to 0.75 is at 27 percent at the September 2016 meeting, 33 percent at the November 2016 meeting, and 55 percent at the December meeting.

The precious metal was given further support as the U.S. Dollar Index fell by 0.37 percent to 95.64 as of 1750 GMT. The index is a measure of the dollar against a basket of major currencies. Gold and the dollar typically move in opposite directions, which means if the dollar goes up, gold futures will fall as gold, measured by the dollar, becomes more expensive for investors.

The weekly jobless claims report released by the U.S. Department of Labor on Thursday prevented the precious metal from rising further as the jobless claims for the week of August 27th came in on the low end of expectations, putting pressure on the precious metal. Analysts note that this is a good sign for the big jobs report due Friday, and may balance out the worse-than-expected ISM report.

Silver for December delivery rose 23.6 cents, or 1.26 percent, to close at 18.943 dollars per ounce. Platinum for October delivery dropped 4.6 dollars, or 0.44 percent, to close at 1,048.9 dollars per ounce. Endit