MADRID — Gold futures bounced back in Europe and Asia trading hours on Monday, as investors hauled the precious metal off its lowest close since last July and dismissed some downbeat data out of China.
Doubling gains in seen in Asia, gold for delivery in April GCJ3 +1.16% rose $18 to $1,590.90 an ounce in electronic trading in Europe on Monday.
Reuters
The initial reading of HSBC’s Chinese manufacturing survey showed a slower pace of expansion in February, owing to a decrease in new export orders and a backlog of existing work.
The precious metal fell $5.80, or 0.4%, to settle at $1,572.80 an ounce on the Comex division of the New York Mercantile Exchange on Friday. Gold thus closed out the week with a 2.3% loss and at the lowest settlement level for a most active contract since July 18. Read: Gold ends at seven-month low, down 2.3% on week
Gold was battered last week, in part after the minutes from January’s Federal Open Market Committee meeting hinted that the Federal Reserve may scale back its massive asset- buying program earlier than expected.
“Gold’s correlation with risky assets has fallen, but that with U.S. Treasurys has risen. Combined with the market’s hawkish read on the FOMC minutes, gold has tumbled to seven-month lows,” said Suki Cooper, commodities strategist at Barclays Capital.
Is this a weird time for the market?
Discussing the current state of the market.
Cooper noted that gold weakened even after an improvement in demand in India and buying in China.
“Prices have struggled to find a cushion from the physical market as it fails to offset the weakness on the investment side,” she said.
Net redemptions accelerated in February, Cooper noted, with the largest gold exchange-traded product, the SPDR, seeing net redemptions of 21 tonnes in a single session for its weakest daily session since August 2011.
The market focus will now turn to the non-farm payrolls data and the debt- ceiling vote in the U.S. after that, she said.
Other metals followed gold’s lead, adding to gains seen in Asian trading. Silver for March delivery SIH3 +2.23% rose 57 cents to $29.03, after tumbling 4.7% last week, while March copper futures HGH3 +0.74% added a penny to $3.54 a pound. Copper lost 5.5% last week.
April platinum PLJ3 +0.26% surged $22.90, or 1.4%, to $1,630.30 an ounce while March palladium PAH3 +2.01% gained $14.70, or 2%, to $750.80 an ounce. Those metals lost 4.2% and 2.4%, respectively last week.(MarketWatch)
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