Forexpros – Gold prices rose in Asian trading on Monday as investors ditched the dollar, gold’s traditional hedge, to invest in other currencies and securities on news that China’s factory output surprised on the upside in March.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.16% at USD1,674.55 a troy ounce.
Gold futures were likely to test support at USD1661.65 a troy ounce, Friday’s low, and resistance at USD1,699.55, Tuesday’s high.
The China Federation of Logistics and Purchasing reported that its purchasing managers index rose 2.1 points to 53.1 in March, up from February’s 51.0 and January’s 50.5, according to the Associated Press.
A reading above 50 signifies expansion, and a healthy Chinese economy relfects healthy global demand for manuafactured goods made in China.
Concerns have arisen as of late that China’s economy will continue growing but not at the pace as once hoped, and the better-than-expected March data prompted investors to take on risk, thus selling greenbacks in exchange for other currencies.
Stock futures were up globally as well early in the Asian session as well.
The Chinese data came on trading session on the heels of improving U.S. indicators, which also fueled risk-on trading sentiment in Asia on Monday.
In the U.S., the Thomson Reuters/University of Michigan’s consumer sentiment index for March rose to 76.2, the highest since February 2011, from 75.3 in February, outpacing analysts’ expectations.
The Commerce Department, meanwhile, reported that personal spending rose 0.8% in February, the most in seven months and above expectations for a 0.6% gain.
Europe looked stable as well.
Eurozone ministers agreed last week to boost the bloc’s bailout lending ceiling to EUR800 billion, to halt the threat of sovereign debt contagion spreading to larger economies such as Italy and Spain.
The firewall will rely on EUR500 billion from the European Stability Mechanism, which takes effect in July, another EUR200 billion already committed in loans to Greece, Ireland and Portugal and EUR100 billion in bilateral loans and European Union funds.
Meanwhile, Japan’s Tankan manufacturing index remained unchanged unexpectedly at a seasonally adjusted -4 in the first quarter of 2012 from -4 in the fourth quarter of 2011.
Analysts had expected the index to rise to -1 in the last quarter.
Elsewhere on the Comex, silver for May delivery was down 0.01% and trading at USD32.480 a troy ounce, while copper for May delivery was up 1.06% and trading at USD3.865 a pound.
Forexpros
