Gold Losing Its Luster After Recent Run-up
Washington (Oct 23) Gold prices are lower Thursday morning, extending previous session's slide, ahead of weekly US jobless claims data.
The yellow metal is losing some ground due to profit taking, having surged to a six-week high at one point on Wednesday.
Data showing a modest expansion in Chinese manufacturing activity in October is contributing as well to the precious metal's decline.
A preliminary reading of China's HSBC manufacturing index inched up to a three-month high of 50.3 in October from 50.2 in September and above forecasts for 50.3. However, the level of output in factories fell to a five-month low of 50.7 in October.
Gold futures for December delivery are down USD10.50 or 0.84% at USD1,235.00 an ounce.
On Wednesday, gold futures ended down USD6.20 or 0.5% at USD1,245.50 an ounce, snapping a two-day gain.
The dollar rose against some major currencies after data from the Labor Department showed US inflation to have risen marginally in September, contributing to the yellow metal's decline.
The Federal Reserve may not hike interest rates anytime soon, despite recent fairly upbeat US economic data. Also, recent speeches from Fed officials indicate the central bank may delay the end of its asset purchase program until at least the summer of 2015. Expectations that the European Central Bank will soon embark on a full-scale quantitative easing to ward off deflation limited gold's losses.
Increased demand for gold in Asian countries, particularly India and China , amid the ongoing festival season, is also limiting the precious metal's downside.
Meanwhile, worries about the health of eurozone banking industry have resurfaced again with reports from Spanish new agency Efe indicating that eleven banks from six euro zone countries are set to fail the stress tests, with the results due on Sunday.
Silver for December is down USD0.153 or 0.89% at USD17.078 an ounce. Meanwhile, copper is up USD0.015 or 0.51% at USD3.033 per pound.
Traders are looking ahead to the weekly US jobless claims data for the week ended October 18th , due at 8:30 am ET . Economists expect claims to have risen to 285,000 from 264,000 in the previous week.
AT 9 am ET , the Federal House Finance Agency is due to release its house price index for August. Markit is scheduled to release flash estimate of its national manufacturing survey at 9:45 am ET . The consensus estimate calls for a decline in the index to 57 in October from 57.9 in September.
A little later, at 10 am ET , the Conference Board is due to release its leading US economic indicators index for September. The Kansas City Federal Reserve will release the results of its regional manufacturing survey at 11 am ET .
Source: AllianceNews
