Gold Ends Higher On Mixed Data
SAN FRANCISCO (Aug 22) Gold futures ended higher Thursday, after fluctuating for most of the day on some mixed macroeconomic data out of the U.S., with uncertain signs the Federal Reserve would begin tapering its quantitative easing program later in the year. Gold made gains as China's manufacturing activity expanded in August, raising hopes of increased demand for the precious metal from its second biggest consumer in the world.
While a Conference Board report showed continuing recovery in the economy with its index of leading U.S. economic indicators rising more than expected in July, initial jobless claims for U.S. unemployment benefits rose more than anticipated last week.
Activity in China's manufacturing sector bounced back from contraction territory in August as new orders recovered, a preliminary survey by Markit Economics and HSBC showed. The flash HSBC purchasing managers' index rose to 50.1 in August from a 11-month low of 47.7 in July. Economists expected the index to increase to 48.2.
Gold for December delivery, the most actively traded contract, gained $0.70 or 0.05 percent to close at $1,370.80 an ounce Thursday on the Comex division of the New York Mercantile Exchange.
Gold for December delivery scaled an intraday high of $1,381.40 and a low of $1,354.50 an ounce.
Yesterday, gold settled almost flat as the tone of the minutes of the FOMC meeting, released Wednesday, did not meaningfully reduce the risk of tapering this year.
The Federal Reserve remains divided about when to taper its massive bond-buying plan, the minutes of their July meeting revealed Wednesday. A few members said the Fed should be patient before scaling back monetary stimulus, while some argued that "it might soon be time to slow somewhat." Several members "were somewhat less confident about a near-term pickup in economic growth than they had been in June."
Still, most expect the Fed will slow down the pace of its $85 billion-per-month asset purchase plan by the end of the year, as long as the economic recovery continues. The reluctance to taper was based on concerns of higher oil prices, slow growth in key U.S. export markets, and reduced government spending. Policy makers also fear any talk of premature tightening could rattle equity markets.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 913.52 tons from 914.12 tons.
