News Column

Gold Ends Higher On Demand Growth Prospects

May 22, 2014



WASHINGTON (Alliance News) - Gold futures ended higher on Thursday, after the world's second biggest consumer of gold, India, lifted some of the restrictions on import of the precious metal. Gold also found additional support with reports of some fierce fighting in eastern Ukraine, notwithstanding some largely upbeat global economic data.

The Reserve Bank of India had imposed major restrictions on gold imports in order to check the current account deficit, with the rupee dropping. The Indian central bank's move now enables more players to import gold apart from the permitted banks, which is expected to help boost exports.

Gold for June delivery, the most actively traded contract, gained USD6.90 or 0.5% to close at USD1,295.00 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for June delivery scaled an intraday high of USD1,304.10 and a low of USD1,290.10 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, declined to 776.89 tons on Thursday, from its previous close of 780.19 tons.

The dollar index, which tracks the US unit against six major currencies, traded at 80.27 on Thursday, up from its previous close of 80.07 late Wednesday in North American trade. The dollar scaled a high of 80.28 intraday and a low of 80.07.

The euro traded lower against the dollar at USD1.3647 on Thursday, as compared to its previous close of USD1.3687 late Wednesday in North America. The euro scaled a high of USD1.3690 intraday and a low of USD1.3646.

In economic news from the US, the data from the Labor Department showed initial jobless claims to have climbed to a more than expected 326,000 in the week ended May 17. Economists expected claims to increase to 310,000 from 297,000 in the previous week.

The data released by the National Association of Realtors showed existing home sales in the US, rose 1.3% to a seasonally adjusted annual rate of 4.65 million in April, from 4.59 million in March. That was slightly lower than an expected climb to 4.69 million.

The Conference Board's index of leading US economic indicators was up for the third consecutive month, rising by 0.4% in April following an upwardly revised 1.0% increase in March.

Meanwhile, according to the flash purchasing managers index released by Markit, US manufacturing activity improved to a 3-month high in May, with the manufacturing PMI rising to 56.2 compared to the 55.4 in April. The consensus estimate called for an increase to 55.9.

The UK economy grew at a faster pace as initially estimated in the first quarter, with its gross domestic product up 0.8% from the prior quarter, and unchanged from the estimate published on April 29. The sequential growth follows a 0.7% rise in the fourth quarter of last year. On a yearly basis, GDP rose 3.1% in the first three months of 2014, in line with initial estimates.

China Manufacturing Purchasing Managers' Index improved to 49.7 in May from a final reading of 48.1 in April, according to a HSBC Flash reading. Economists estimated a reading of 48.4. Nonetheless, this is still below the 50-point with indicates a contraction.



For more stories on investments and markets, please see HispanicBusiness' Finance Channel



Source: Alliance News