Gold Futures Settle Sharply Higher On Safe-haven Appeal

Trading 03 sept 2019 Donner votre avis

Gold prices surged higher on Tuesday on safe-haven appeal after global stocks drifted lower amid a lack of clarity on resumption of U.S.-China trade talks and due to political uncertainty over Brexit chaos.

Data showing a contraction in U.S. manufacturing activity for the first time in three years and the dollar's retreat from higher levels contributed as well to gold's uptick.

The dollar index, which advanced to 99.37 earlier in the day, eased to 98.93 later on in the session, up just slightly from previous close.

Gold futures for December ended up $26.50, or 1.7%, at $1,555.90 an ounce, their highest settlement since April 2013.

On Friday, gold futures for December ended down $7.50, or 0.5%, at $1,529.40 an ounce, losing ground for a third successive session.

Silver futures for December ended up $0.895, at $19.237 an ounce, while Copper futures for December settled at $2.5280 per pound, down $0.235 from previous close.

In economic news, U.S. manufacturing activity contracted for the first time in three years in the month of August, according to a report released by the Institute for Supply Management on Tuesday.

The ISM said its purchasing managers index fell to 49.1 in August after dipping to 51.2 in July, with a reading below 50 indicating a contraction in manufacturing activity. Economists had expected the index to edge down to 51.0.

With the bigger than expected decrease, the PMI dropped below 50 for the first time since August of 2016 and hit its lowest level since January of 2016.

Meanwhile, a report released by the Commerce Department showed a slight uptick in U.S. construction spending in the month of July following a smaller than previously estimated slump in June.

The Commerce Department said construction spending inched up by 0.1% to an annual rate of $1.289 trillion in July after sliding by 0.7% to a revised June rate of $1.288 trillion.

Economists had expected construction spending to rise by 0.3% compared to the 1.3% nosedive originally reported for the previous month.

On the trade front, China has approached the World Trade Organization after the Trump administration levied an extra 15% tariff on $300 billion worth of Chinese imports from September 1.

China will "firmly safeguard its own legitimate rights and interests and resolutely uphold the multilateral trading system as well as the international trade order in line with WTO rules," the Chinese Ministry of Commerce said.

Meanwhile, in Brexit news, the U.K. Prime Minister Boris Johnson today lost his majority in Parliament as conservative lawmaker Phillip Lee defected to the pro-European Liberal Democrat party. Lee said Johnson was ignoring expert advice on Brexit.

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