Forexpros – Gold futures moved higher on Thursday, climbing to a two-week high as risk sentiment improved following the release of better-than-expected U.S. manufacturing data.
On the Comex division of the New York Mercantile Exchange, gold futures for February delivery traded at USD1,755.15 a troy ounce during U.S. morning trade, gaining 0.29%.
It earlier rose by as much as 0.4% to trade at USD1,757.95 a troy ounce, the highest price since November 17.
Gold futures were likely to find support at USD1,700.50 a troy ounce, the previous day’s low and resistance at USD1,766.95, the high of November 17.
The U.S. Institute for Supply Management said earlier that its index of purchasing managers rose by the most in five months in November, climbing to 52.7 from 50.8 in October. Analysts had expected the ISM index to rise to 51.5.
The upbeat data saw appetite for riskier assets strengthen, dampening demand for the safe haven U.S. dollar. The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was down 0.3% to trade at 78.23.
Gold is often considered a haven during times of financial turmoil, but for the past two months, the precious metal has risen and fallen in line with riskier assets, such as stocks and commodities.
Prices swung between small gains and losses earlier after the U.S. Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week rose unexpectedly, climbing above 400,000 for the first time in three weeks.
Meanwhile, Spain’s Treasury auctioned the full targeted amount of EUR3.75 billion of government bonds earlier in the day, while France auctioned as much as EUR4.5 billion of debt, but both countries saw borrowing costs increase.
The auctions were seen as a major test of investor confidence, coming one day after six major central banks, including the Federal Reserve and the European Central Bank cut the cost of emergency dollar funding for European banks in a coordinated action.
But investors remained jittery after European Central Bank President Mario Draghi said earlier that downside risks to the economic outlook have increased.
Despite the recent volatility in prices, Wall Street investment bank Morgan Stanley said that its preferred commodity investment choice for 2012 was gold, as the precious metal traditionally performs well in an environment of a global economic slowdown.
“The defensive nature of gold, and silver to a lesser degree, will create significant investment demand as investors look for safe havens in a period of risk aversion,” the bank said in a report.
Elsewhere on the Comex, silver for March delivery rallied 1.65% to trade at USD33.34 a troy ounce, while copper for March delivery shed 0.45% to trade at USD3.561 a pound.
Silver prices found support after Europe’s largest bank HSBC Holdings raised its average silver price forecast for 2012 to USD34 an ounce, up from a previous forecast of USD32 an ounce, on expectations demand for the metal as an investment will rise.
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