Gold Futures Settle Higher As Dollar Drops On Strong Chinese Data
Gold prices climbed higher on Wednesday, rising for a third straight session, as a weak dollar pushed up the demand for the yellow metal.
The dollar drifted lower after upbeat data on China’s factory activity lifted risk sentiment.
China’s official manufacturing Purchasing Managers’ Index rose to 52.6 from 50.1 in January, smashing expectations after the country abruptly lifted COVID-19 curbs.
China’s non-manufacturing activity also grew at a faster pace in February and the private sector index from Caixin/S&P showed factory activity rising for the first time in seven months, helping ease investor fears over rising interest rates.
The dollar index dropped to a low of 104.09 earlier in the day, but recovered to 104.50 later on, cutting its loss to around 0.36%.
Gold futures for April ended higher by $8.70 or about 0.5% at $1,845.40 an ounce.
Silver futures for May ended up $0.024 at $21.095 an ounce, while Copper futures for May settled at $4.1600 per pound, gaining $0.0705.
A report from the Institute for Supply Management on U.S. manufacturing activity in the month of February.
While the ISM said its manufacturing PMI inched up to 47.7 in February from 47.4 in January, a reading below 50 still indicates a contraction. Economists had expected the index to edge up to 48.0.
The report also showed the prices index jumped to 51.3 in February from 44.5 in January, indicating raw materials prices increased after decreasing for four consecutive months.
A report released by the Commerce Department showed construction spending in the U.S. unexpectedly edged slightly lower in the month of January, dropping by 0.1% to an annual rate of $1.826 trillion in January after falling by 0.7% to a revised rate of $1.828 trillion in December.
Economists had expected construction spending to inch up by 0.2% compared to the 0.4% decrease originally reported for the previous month.
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