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What’s next? – GOLD 06.02.18

Feb 6 2018, 01:20 PM (+06) | Fortfs.com

Gold prices were higher in Asian trading hours on Tuesday, despite the dollar strengthening as many traders flew to safe-havens in the light of a massive global sell-off.

 

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.79 percent at $1.337.00 a troy ounce as of 06:35 GMT.

 

The yellow metal extended losses on Monday as the dollar continued to rise supported by economic data, building speculation that the Federal Reserve will soon resume its path for monetary policy normalization as prospect for economic growth remain solid.

 

The dollar-denominated metal is sensitive to changes in the dollar. A stronger base currency makes the precious metal more expensive for investors and therefore, reduces its demand.

 

The US dollar index, which measures the greenback against six major currencies, was trading 0.05 percent higher at 89.45 by the time of this writing.

 

Future contracts for February delivery on the Comex division of the New York Mercantile Exchange were up nearly one dollar in late trading hours on Monday at $1,338.50 per ounce.

 

On the data front, Markit Economics released its composite PMI for January in the United States, along with services PMI, both below forecast at 53.8 and 53.3 respectively.

 

Later on, the Institute for Supply Management said its non-manufacturing PMI for January outperformed its estimation at 59.9 from a 56.5 reading seen.

 

The latest report by the Commitment of Traders (COT) said money managers and hedge funds reduced their speculative net long position in gold in 7,000 contracts to a total of 207,300.

 

Ahead in the day, investors will be keeping an eye on the US trade balance for December at 13:30 GMT, with a $52.10 billion deficit seen, and JOLTs job openings as of 15:00 GMT, with 5.9 million openings eyed.

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