Forexpros – Gold prices rose in Asian trading on Tuesday as investors sold the metal’s traditional hedge, the dollar, which weakened when strong U.S. manufacturing data hit the wire and also on news that an Indian jewelers’ strike ended.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded up 0.08% at USD1,681.05 a troy ounce.
Gold futures were likely to test support at USD1664.45 a troy ounce, Monday’s low, and resistance at USD1,699.55, the high on March 27.
In the U.S., manufacturing activity expanded more than forecast in March, with the Institute for Supply Management, an association of purchasing managers, reporting that its manufacturing index rose to 53.4 in March from 52.4 in February, outpacing expectations for a reading of 53.0.
Readings above 50 indicate a sector in expansion.
The news sent investors selling dollars to free up capital to invest in stocks and other riskier assets, sending gold rising in the process.
The news came on the heels of surprisingly strong factory data out of China.
The China Federation of Logistics and Purchasing reported earlier this week 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 also signifies expansion.
Meanwhile in India, one of the world’s largest gold markets, a jewelers’ strike ended, priming hopes physical demand will rise now that the work stoppage is over.
Indian jewelers went on strike to protest country’s decision to slap a 4% import duty hike on gold and a 0.3% excise tax on most gold jewelry as part of move to narrow deficits.
Elsewhere on the Comex, silver for May delivery was down 0.24% and trading at USD33.018 a troy ounce, while copper for May delivery was up 0.04% and trading at USD3.917 a pound.
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