Forexpros – Gold prices dipped in early Asian trading Wednesday, falling on reports U.S. manufacturing data came in stronger than forecast, which diminished the chances for monetary stimulus measures that often send the yellow metal climbing.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded down 0.09% at USD1,660.95 a troy ounce.
Gold traded at a low of USD1,660.35 a troy ounce and hit a high of USD1,663.75 a troy ounce during the session.
The precious metal sought to test support at USD1,647.35 a troy ounce, the low of April 30, and resistance at USD1,672.15, the high on May 1.
The U.S. Institute for Supply Management reported that its April manufacturing purchasing managers’ index surged to 54.8 in April, from 53.4 in March and well above market forecasts for a reading of 53.0.
The news quelled recent expectations that the Federal Reserve would intervene in the economy via quantitative easing, a monetary stimulus tool with which the Fed buys bonds from banks, injecting liquidity into the economy to encourage investment and hiring while weakening the dollar in the process.
Disappointing consumer spending, unemployment and gross domestic product figures have fueled talk the Federal Reserve will consider stimulating the economy via quantitative easing.
Federal Reserve Chairman Ben Bernanke has said he cannot rule out quantitative easing, and even mention of such policy can send the dollar falling and its traditional hedge, gold, rising.
The metal did find some support on slightly weaker-than-expected Chinese manufacturing data.
The China Manufacturing Purchasing Managers Index rose to a 13-month high to 53.3 in April from 53.1 in March.
The number fell slightly below forecasts for a reading of 53.6.
Elsewhere on the Comex, silver for July delivery was up 0.15% and trading at USD30.975 a troy ounce, while copper for July delivery was down 0.21% and trading at USD3.830 a pound.
