Gold futures settled at a near two-week high Wednesday, after the dollar weakened against a basket of major currencies after a some weak macroeconomic data out of the U.S., suggesting a slowdown in the world’s largest economy. Gold found support from bargain hunters with physical demand for the precious metal, especially with the short supply of bars and coins.. In another troubling sign for the U.S. manufacturing sector, a Commerce Department report on Wednesday showed a much bigger than expected drop in new orders for manufactured durable goods in March, evidencing a marked slowdown for the economy. This could also mean no pull back to the quantitative easing measures in the near term as was anticipated by some analysts, but which would help gold thrive on fears of inflation.
Gold for June delivery, the most actively traded contract, gained $14.90 or 1.1 percent to close at $1,423.70 an ounce Wednesday on the Comex division of the New York Mercantile Exchange. Gold for June delivery scaled an intraday high of $1,433.60 and a low of $1,411.50 an ounce.
Yesterday, gold settled lower on some weak macroeconomic data out of China indicating a slowdown in economic activity, coupled with some soft new home sales from the U.S. Gold prices also stumbled with the dollar gaining in strength against a basket of major currencies and the euro. Investors sought riskier assets with global equity markets trending higher, even as physical demand for commodities waned. The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.94 on Wednesday, down from 83.02 late Tuesday in North American trade. The dollar scaled a high of 83.19 intraday and a low of 82.85.
The euro traded higher against the dollar at $1.3014 on Wednesday, as compared to $1.3001 late Tuesday in North America. The euro scaled a high of $1.3033 intraday and a low of $1.2956. In economic news from the U.S., the Commerce Department said durable goods orders tumbled by 5.7 percent in March following a revised 4.3 percent increase in February. Economists expected orders to drop by 2.8 percent compared to the 5.6 percent increase reported for the previous month. Excluding a sharp drop in orders for transportation equipment, durable goods orders still fell by 1.4 percent in March versus a 1.7 percent drop in February.
From the eurozone, Germany’s business confidence deteriorated more than economists expected in April, reports citing a Ifo Institute survey said. The headline business confidence index dropped to 104.4 April from 106.7 in March. Economists had forecast the index to decline to 106.2. The expectations of sub-index declined to 101.6 from 103.6 in February. It was forecast to drop to 103.
Meanwhile, the number of mortgage approvals for house purchase in the U.K. increased in March, the British Bankers’ Association (BBA) said. Mortgage approvals totaled 31,227 in March, up from 30,579 in February. Economists had forecast approvals to rise to 31,400.
Source: RTT Staff Writer
Source: Bullion Bulletin