News Column

Gold Ends Slightly Higher On Bargain Hunting

September 3, 2014

WASHINGTON (Alliance News) - Gold futures rebounded to end slightly higher on Wednesday, due mainly to some bargain hunting after yesterday's sharp fall, even as investors tracked rising global equity markets and some positive factory orders data from the US

Strong equity markets amid conflicting reports about a ceasefire agreement between Russia and Ukraine continued to limit the bullion's gains.

Manufacturing activity in the US grew at an accelerated pace in August with orders for transportation equipment indicating a substantial increase, data from the Institute for Supply Management showed Tuesday.

There was also some upbeat economic news out of China, with a report showing the Chinese service sector activity to have grown at a faster rate in August.

Gold for December delivery, the most actively traded contract, gained USD5.3 or 0.4% to close at USD1,270.30 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for December delivery scaled an intraday high of USD1,272.40 and a low of USD1,261.90 an ounce.

On Tuesday, gold futures ended sharply lower on some upbeat US economic data, with a stronger dollar amid expectations of fresh monetary stimulus by the European Central Bank contributing to the decline.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 793.20 tons on Wednesday, from its previous close of 795.00 tons on Tuesday.

The dollar index, which tracks the US unit against six major currencies, traded at 82.88 on Wednesday, down from its previous close of 82.97 late Tuesday in North American trade. The dollar scaled a high of 83.06 intraday and a low of 82.89.

The euro trended higher against the dollar at USD1.3139 on Wednesday, as compared to its previous close of USD1.3134 late Tuesday in North American trade. The euro scaled a high of USD1.3160 intraday and a low of USD1.3124.

In economic news from the US, a report from the Commerce Department showed factory orders to have surged up by 10.5% in July, after climbing by an upwardly revised 1.5% in June. Economists had been expecting orders to jump by about 10.9% compared to the 1.1% increase originally reported for the previous month.

On Thursday, the European Central Bank will announce its monetary policy. Hopes about fresh stimulus from the European Central Bank have risen after eurozone retail sales declined by a more than expected 0.4% in July.

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Source: Alliance News

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