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Gold gains on solid Chinese factory, service-sector data

Published 12/02/2012, 09:23 PM
Updated 12/02/2012, 09:24 PM
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Investing.com - Gold prices jumped up in Asian trading on Monday after solid Chinese manufacturing and service-sector data were released and fueled hopes the country is turning the corner to more robust growth rates.

On the Comex division of the New York Mercantile Exchange, gold futures for February delivery were up 0.51% at USD1,721.35 a troy ounce, up from a session low of USD1,717.65 and down from a high of USD1,722.45 a troy ounce.

Gold futures were likely to test support at USD1,710.45 a troy ounce, Friday's low, and resistance at USD1,733.65, Friday's high.

China Logistics Information Center revealed earlier that its manufacturing purchasing managers' index rose to an annual rate of 50.60 for November from 50.20 in the preceding month.

The data met expectations, though the number was strong enough to fuel hopes China will stick with a 7.5% gross domestic product growth target for 2013.

Meanwhile, China's service-sector purchasing managers' index hit 55.6 in November from 55.5 in October.

The numbers sparked a risk-on trading session that sent the dollar falling, which sent gold rising as the two asset classes normally trade inversely from one another.

A stronger euro brought up gold prices as well.

E.U. and I.M.F. officials recently hammered out a plan for Greece to reduce its debt to 124% of gross domestic product by 2020 in exchange for fresh aid payments.

Germany's parliament on Friday gave the accord the green light, and German Chancellor Angela Merkel told the Bild am Sonntag newspaper afterwards the country would be willing to consider writing off Greek debt if Athens can rely on its own revenue and cease borrowing.

Fiscal murkiness in the U.S. capped gains and kept some investors parked in U.S. dollar positions.

Investors continued to monitor negotiations between Congress and the White House over how to deal with the fiscal cliff, a series of tax hikes and spending cuts due to take effect at the same time at the end of this year.

The U.S. nonpartisan Congressional Budget Office has said failure to steer the country away from the fiscal cliff could tip the economy into a recession next year.

Elsewhere on the Comex, silver for March delivery was up 1.43% and trading at USD33.755 a troy ounce, while copper for March delivery was up 0.45% and trading at USD3.659 a pound.







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