Gold Rises on Global Economic Optimism
Source: MarketWatch, Nick Godt (2/1/10)
"Gold futures rose Monday, receiving a lift from upbeat manufacturing data from the U.S., Europe and China"
Gold for April delivery was recently up $11.50, or 1%, to $1,095.30 an ounce in electronic trade. The precious metal fell 0.6% last week and lost 1.2% in January.
In the U.S., the Institute for Supply Management said its factory index jumped to 58.4% in January from 54.9% in December, well above expectations. The consensus forecast of estimates collected by MarketWatch was for the index to rise to 56.0%.
On Friday, gold fell slightly as the dollar rallied on the back of strong U.S. economic-growth and consumer-sentiment reports, reducing the value of the precious metal as an alternative to paper currencies.
But on Monday, upbeat manufacturing data for the euro zone helped lift the euro and pressure the dollar.
The dollar index (DXY 79.25), which measures the U.S. unit against a basket of six major currencies, fell 0.3% to 79.24.
The SPDR Gold Trust (GLD 108.12), the largest exchange traded fund backed by gold, rose 1.1%.
According to GoldCore analysts, investors in the precious metal also keyed on President Barack Obama's projection for "a massive U.S. budget deficit."
This "will test the dollar and should support gold," they wrote in a note.
Among other metals Monday, March palladium rose $13.25, or 3.3%, to $425.80 an ounce. April platinum rose $12.10, or 0.8%, to $1,506 an ounce.
Copper for March delivery rose 4 cents, or 1.2%, to $3.09 a pound. Silver for March delivery was up 29 cents to $16.48 an ounce.