Gold futures re-approach $1,200 after mixed bag of U.S. data

Investing.com - Gold prices re-approached the $1,200-level on Tuesday, as investors reacted to a mixed bag of U.S. data.

On the Comex division of the New York Mercantile Exchange, gold futures for June delivery climbed $9.20, or 0.78%, to trade at $1,196.00 a troy ounce during U.S. morning hours after hitting an intraday peak of $1,199.00.

A day earlier, gold rose $12.30, or 1.05%, to close at $1,186.80. Futures were likely to find support at $1,168.40, the low from May 1, and resistance at $1,207.40, the high from April 30.

Also on the Comex, silver futures for July delivery rallied 14.6 cents, or 0.89%, to trade at $16.58 a troy ounce. On Monday, futures jumped 30.6 cents, or 1.9%, to end at $16.44.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.1% to trade at 95.48 early Tuesday after rising to an overnight peak of 96.10.

The greenback turned lower after official data showed that the U.S. trade deficit widened 43% to $51.37 billion in March, the highest level since 1996, as exports edged up 0.9% and imports surged 7.7%.

The disappointing report fuelled speculation that first-quarter gross domestic product, which showed expansion of 0.2%, could be revised to show growth contracted.

Meanwhile, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to a five-month peak of 57.8 in April, above forecasts for a reading of 56.2 and up from 56.5 in March.

Investors are also waiting for the U.S. nonfarm payrolls report for April due on Friday for further clues on when the Federal Reserve may raise interest rates.

A strong U.S. nonfarm payrolls report was likely to add to speculation over when the Federal Reserve will begin to raise interest rates, while a weak number could boost gold by undermining the argument for an early rate hike.

Elsewhere in metals trading, copper for July delivery inched up 1.4 cents, or 0.48%, to trade at $2.935 a pound. Prices slumped 0.9 cents, or 0.38%, on Monday to settle at $2.920.

Data released Monday showed that Chinese manufacturing activity contracted at the fastest rate in a year in April, adding to concerns over a slowdown in the world’s second-largest economy.

The dismal data reinforced expectations that policymakers in Beijing will have to introduce further stimulus measures to jumpstart the economy amid lackluster growth.

Since November, the People's Bank of China has introduced a series of stimulus measures, including lowering interest rates twice and cutting the reserve requirement ratios of major banks twice, in order to spur economic activity and boost growth.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption.