Gold Starts April Strong

Monday, 01 April 2013
Written by  Market Watch
Published in Gold Investing
Gold started the new month off strong, opening April with a nice push toward the $1,600 per ounce price mark. The shot up in price was also helped by some safe haven demand, as weaker than expected manufacturing data was released.

Positive-Pullback

Data that was released on Monday showed that the pace of sales and production at U.S. manufacturers has surprisingly slowed down in March. The Institute for Supply Management’s survey of senior executives fell to 51.3% from 54.2% in February. Economists that were polled by Market Watch expected the index to hold steady. That being said, this was a nice boost in the arm for gold prices, even if it meant slower data.

Gold for June delivery GCM3 +0.26% was up by $5.20, or 0.3% to start the new month, to settle at $1,600.90 an ounce on the Comex division of the New York Mercantile Exchange. Prices fell 0.7% on Thursday to $1,595.70. Trading on Comex was closed for Good Friday. Easter weekend provided somewhat of a fresh start, so we will see how the rest of the week plays out and see if gold can make even more gains on the week.

“The rate of unemployment has now taken on greater significance,” with a target at 6.5%, as to when the Federal Open Market Committee curtails quantitative-easing measures, said Wright. “The gold market will be looking very closely at the substance of unemployment numbers.”

Gains for gold Monday also came as the U.S. dollar weakened. The dollar index DXY -0.35% , which measures the greenback’s performance against six other major currencies, dropped to 82.746 on Monday from 82.998 on Friday. Dollar weakness often provides support for prices of dollar-denominated commodities such as gold and oil.

As we know, a lot of what happens to the price of gold is tied into what the dollar index is doing. Gold looked like it had moved away from the dollar some last year and become more independent, but it looks like the yellow metal is stilled tied to the dollar more than initially thought.

The yellow metal is still trying to finds a footing for 2013 and make a run at the long awaited $2,000 per ounce price mark. This is a mark that many thought would happen this year, but it looks like at the very best gold will make a run up, but not quite get there until 204. However, as we all understand, with gold, this could change at any point.

Original Article: Market Watch by the Wall Street Journal

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