New York, US (BBN) – Gold drifted higher in Asia on Tuesday in cautious trade with China and India markets shut for holidays, putting the world’s top gold importers on the sidelines and with investors cautious ahead of a meeting this week between US.
President Donald Trump and China’s President Xi Jinping in Florida seen as high stakes on trade and geopolitical tensions in Asia, reports investing.com
Gold for April delivery on the Comex division of the New York Mercantile Exchange gained 0.35 per cent to $1,258.45 a troy ounce.
Silver futures on the Comex rose 0.55 per cent to $18.312 a troy ounce, while copper futures edged up 0.12 per cent to $2.609 a pound.
Overnight, gold prices held firm on Monday, after the release of mixed economic data while a softer dollar limited selling pressure in the yellow-metal.
Gold recovered from a dip earlier during the session, after March construction spending disappointed while economic activity in the manufacturing sector slowed less than expected.
The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) hit 57.2 in March, a 0.5 per cent decrease from the February reading of 57.7 but slightly above economists’ forecasts of 57.0.
Meanwhile, the Commerce Department said, February US construction spending increased 0.8 per cent to its highest level in more than ten years but it missed analysts’ expectations of 1 per cent rise.
Gold prices continued to trade in a tight range, as investors awaited comments from several Federal Reserve officials later during the session and a key nonfarm payrolls report on Friday, to assess the likelihood of a June rate hike. According to Investing.com’s Fed Rate monitor tool, 50 per cent of traders expect a June rate hike.
Gold is sensitive to moves in US interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
Gold gained more than 8 per cent in the first quarter, benefiting from political uncertainty in Europe, after the UK triggered Article 50 to formally kick off the Brexit process while investors continued to worry that anti-EU candidate Marine Le Pen could stage a surprise victory in the upcoming French presidential election.
Meanwhile, cash crunches in India due to the government’s recent demonetization will likely act as a temporary headwind for gold prices in the coming months, according to a report from FocusEconomics Consensus Forecast – Commodities.
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