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MTECHTIPS:-Gold jumps to new 3-month high after weak U.S. ISM report
Gold futures rallied to a new three-month high in North America trade on Monday, drawing support from weak U.S. manufacturing data that raised hopes the Federal Reserve may slow any planned interest rate hikes. Gold for April delivery on the Comex division of the New York Mercantile Exchange rose to an intraday peak of $1,129.40 a troy ounce, a level not seen since November 3, before trading at $1,127.60 by 15:20GMT, or 10:20AM ET, up $11.20, or 1%, to trade at $1,121.00 a troy ounce. The Institute for Supply Management said its index of purchasing managers inched up to 48.2 last month from a reading of 48.0 in December, which was the lowest since July 2009. 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, most likely in July, 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. Prices of the precious metal ended January with a gain of 5.4%, its biggest monthly rise in a year, as investors sought refuge from turmoil in global equity markets. Gold is often seen as an alternative currency in times of global economic uncertainty and a refuge from financial risk. Also on the Comex, copper fell to a one-week low on Monday, as the release of downbeat Chinese manufacturing activity data underlined concerns over the health of the world’s second largest economy.
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