Gold Trades Near Three-Month High After Data Depress U.S. Dollar
(Bloomberg) - Gold traded near the highest since February after weak U.S. data sent the dollar to a four-month low. Bullion for immediate delivery was at $1,222.87 by 10:18 a.m. in Singapore from $1,224.80 on Friday when prices capped a
3.1 percent weekly gain, the most since Jan. 16, Bloomberg generic pricing shows. The metal gained to $1,227.26 on May 14,the highest since Feb. 17. Gold in Shanghai rose a fourth day.
Investors are tracking economic data for signs of when the Federal Reserve will raise borrowing costs for the first time since 2006. Declining consumer sentiment and softening factory
output drove the Bloomberg Dollar Spot Index lower for a fifth week on Friday, the longest stretch since October 2013, boosting the allure of bullion. Speculators increased their net-long position in the week to May 12 by the most in a month.
“Poor U.S. data fueled a rally in precious metals, which were also supported by a weaker U.S. dollar,” Australia & New Zealand Banking Group Ltd. wrote in a note.
The University of Michigan preliminary index of sentiment dropped in May by the most since December 2012, data on Friday showed. Factory production was unchanged last month after a 0.3
percent gain in March, according to a Fed report. Excluding autos and parts, output declined 0.1 percent in April after climbing 0.1 percent a month before, the report showed.
The Bloomberg dollar gauge, which tracks the greenback versus 10 major trading partners, rose 0.2 percent on Monday after touching 1,149.06 on Friday, the lowest since Jan. 22.
Gold for June delivery fell 0.3 percent to $1,221.60 an ounce on the Comex after rising 3.1 percent last week.
Speculators’ net-long position in gold jumped 14 percent to 36,150 futures and options as of May 12, U.S. Commodity Futures Trading Commission data showed. That was the third advance in four weeks and the biggest gain since April 7.
Bullion of 99.99 percent purity rose 0.2 percent to 244.01 yuan a gram ($1,222.80 an ounce) on the Shanghai Gold Exchange.
A fourth advance would cap the longest streak since March 26.
Silver for immediate delivery lost 0.1 percent to $17.4880 an ounce. Palladium fell 0.4 percent to $790.63 an ounce, while platinum retreated 0.3 percent to $1,163.96 an ounce.