Gold turns higher after productivity report

Gold prices rose on Wednesday on support from a positive US productivity report. Gold sees support from currency moves and a weakening dollar. US productivity rose 1.6% in the second quarter after a decline of .5% in the first quarter of 2012.

By Claudia Assis and Barbara Kollmeyer
Aug. 8, 2012, 10:16 a.m. EDT
Market Watch

SAN FRANCISCO (MarketWatch) — Gold futures turned higher Wednesday, garnering some support from positive U.S. productivity data and trading in sympathy with oil futures.

Gold for December delivery GCZ2 +0.09% advanced $3.80, or 0.2%, to $1,616.80 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

The metal ended lower in the previous session, but kept within the tight range it has traded in recent months.

Gold continues to be hemmed in by currency moves and little physical interest, analysts at VTB Capital said in a note to clients.

“The investor side is likely to remain interested for as long as sentiment is upbeat and peripheral bond yields in the (euro zone) stay off their summer peaks. It might seem illogical, but so far gold has failed to attract any safe-haven inflows, instead trading as any other risk asset and in line with the broader market sentiment,” they said.

U.S. productivity rose 1.6% in the second quarter, the Labor Department said. That contrasted with a decline of 0.5% for the first quarter, and analyst expectations of a rise of 1.3% in the April-to-June period.

Dinging the metal on Wednesday, the dollar pushed higher against the euro EURUSD -0.41% . The single currency fell to $1.2355 against the $1.243 seen in late North American trading the prior day.

The dollar index DXY +0.10% , which measures the currency against a basket of six major rivals, rose to 82.442 from 82.185 late in the prior day.

Oil futures CLU2 -0.50% rose 62 cents, or 0.7%, to $94.27 a barrel, helped by expectations for a drop in supplies.

Austin Kiddle, a director of gold broker Sharps Pixley, said gold is on the brink of moving toward a vital support level as it gets batted around by the global financial crisis. He said he’s drawn a red line at $1,525 an ounce.

“That red line is your brink. Gold has tested that line three times now. It has so far proved support. I see it as a big, big level. And I really hope it holds,” said Kiddle in a research note.

A weaker dollar is positive for gold and other dollar-denominated currencies because it makes those assets cheaper to holders of other currencies.

Among other metals, September copper HGU2 -0.83% fell 2 cents, or 0.5%, to $3.42 a pound. Silver for the same month’s delivery SIU2 -0.47% eased 6 cents, or 0.1%, to $28.04 an ounce.

Sister metals platinum and palladium also posted losses, with October platinum PLV2 -0.18% down $4, or 0.3%, to $1,406.40 an ounce. September palladium PAU2 -0.29% fell $1.45, or 0.3%, to $586.75 an ounce.

To see original article CLICK HERE

Follow Us

Share Page

Weekly Charts

Current Spot Prices


Special Offers

© 2017 Swiss America Trading Corp. All Rights Reserved.   |   Privacy Policy   |   Site Map   |   Contact Us   |   Mobile Version
SWISS AMERICA and Block Logo are registered trademarks of Swiss America Trading Corp.
Where did you hear about us?
Pat BooneMichael Savage
OtherChristopher Greene (AMTV)