(Before It's News)
Gold futures rose to the highest level since November in North America trade on Wednesday, after data showed that service sector activity in the U.S. grew at the slowest pace in almost two years in January, dampening optimism over the health of the economy and dimming the case for higher interest rates this year. The Institute of Supply Management said its non-manufacturing purchasing manager’s index fell 53.5 last month from 55.3 in December, missing forecasts for a reading of 55.1. The disappointing data added to skepticism over the Federal Reserve’s ability to raise interest rates as much as it would like next year. Market participants are anticipating just one more rate hike this year, compared with four according to Fed policymakers’ guidance. A gradual path to higher rates is seen as less of a threat to gold prices than a swift series of increases. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 1% to 97.87, the lowest since December 16, amid speculation slowing growth in the U.S. will prompt the Federal Reserve to delay future interest rate hikes. Gold for April delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,135.00 a troy ounce, the most since November 2, before trading at $1,134.20 by 15:05GMT, or 10:05AM ET, up $7.00, or 0.62%.
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