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Gold gains on Spanish recession, tepid U.S. data

Published 04/30/2012, 08:34 PM
Updated 04/30/2012, 08:35 PM
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Investing.com - Gold prices rose in Asian trading Tuesday on reports Spain has fallen back into recession as well as on news manufacturing activity in the U.S. Midwest came in weaker than expected.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.17% at USD1,669.95 a troy ounce.

Gold traded at a low of USD1,664.55 a troy ounce and hit a high of USD1,668.55 a troy ounce during the session.

The precious metal sought to test support at USD1,643.15 a troy ounce, the low of April 26, and resistance at USD1,681.15, the high on April 12.

Spain officially fell back into recession, the country announced earlier, its second downturn since 2009.

The country's gross domestic product contracted 0.3% during the first quarter, the same amount it contracted during the fourth quarter of 2011.

Tepid data out of the United States sent a few investors snapping up gold positions.

The Chicago purchasing managers’ index, a key gauge for Midwest manufacturing activity, fell by 6.0 points to a seasonally adjusted 56.2 in April from 62.2 in March, the worst reading since November of 2009.

Analysts had expected the index to decline to only 61.0 in April.

The Bureau of Economic Analysis, meanwhile, reported that consumer spending jumped 0.3% in March, slowing from 0.9% the previous month and a little below market hopes for a 0.4% gain.

Personal incomes, meanwhile, rose 0.4% in March, outpacing market forecasts for 0.3% growth.

The sluggish numbers out of the U.S. came in wake of weaker-than-expected GDP growth figures as well as a dismal jobs report in March.

Anticipation that April's jobs report due out Friday will fall short as well has sparked concerns the Federal Reserve will consider stimulating the economy via quantitative easing, under which the U.S. central bank buys bonds held by banks, flooding the economy with stimulating liquidity that weakens the dollar as a side effect.

Fed Chairman Ben Bernanke has said he cannot rule such measures out, which tends to send gold climbing.

Elsewhere on the Comex, silver for July delivery was up 0.25% and trading at USD31.093 a troy ounce, while copper for July delivery was down 0.16% and trading at USD3.831 a pound.







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