Gold futures fluctuate with U.S. data, Fed stimulus in focus

Investing.com - Gold futures swung between modest gains and losses in rangebound trade on Monday, as market players continued to weigh the need for further stimulus in the U.S.

Moves in the gold price this year have largely tracked shifting expectations as to whether the Federal Reserve would end its bond-buying program sooner-than-expected.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,391.25 a troy ounce during European morning hours, down 0.1% on the day.

Comex gold prices held in a tight range between USD1,388.55 a troy ounce, the daily low and a session high of USD1,397.95 a troy ounce.

Gold futures were likely to find support at USD1,353.55 a troy ounce, the low from May 22 and resistance at USD1,421.25, the high from May 31 and a two-week high.

Gold prices tumbled almost 2% on Friday after the University of Michigan said its consumer sentiment index rose to 84.5 in May, its highest level since July 2007, from76.4 in April and up from a preliminary estimate of 83.7.

A separate report showed that manufacturing activity in the Chicago-area improved at the fastest pace in over a year last month.

Market research group Kingsbury International said its Chicago purchasing managers’ index jumped to a seasonally adjusted 58.7 in May from a reading of 49.0 in April. Analysts expected a reading of 50.3

The robust data bolstered expectations that the Federal Reserve could begin to scale back its USD85 billion a month asset purchase program this year.

Any improvement in the U.S. economy could scale back expectations for further easing from the Federal Reserve, weighing on dollar-denominated commodities.

Investors are now looking ahead to the release of a closely watched report on U.S. nonfarm payrolls on Friday for further hints regarding the direction of U.S. monetary policy.

Elsewhere on the Comex, silver for July delivery added 0.45% to trade at USD22.34 a troy ounce, while copper for July delivery rallied 1.35% to trade at USD3.337 a pound.

Copper prices were boosted as stronger-than-expected Chinese manufacturing data bolstered demand for growth-linked assets.

Official data on Sunday showed that China’s manufacturing purchasing managers’ index rose to 50.8 in May from 50.6 in April.

Earlier Monday, a separate report showed that China’s HSBC manufacturing PMI slid down to 49.2 in May, the lowest level since October 2012, from 49.6 in April.

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