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Gold gains in Asia, copper jumps as China PMI surveys mixed

Published 11/30/2015, 09:00 PM
Updated 11/30/2015, 09:02 PM
Gold gains after mixed China PMI surveys

Investing.com - Gold prices gained mildly in Asia on Tuesday as separate China manufacturing surveys showed mixed estimates, but both remained in contraction.

On the Comex division of the New York Mercantile Exchange, gold for February delivery rose 0.24% to $1,067.90 a troy ounce3.

Silver for December delivery rose 0.25% to $14.085 a troy ounce, while copper for March delivery jumped 0.72% to $2.603 a pound.

The China official manufacturing PMI for November fell to 49.6, compared to 49.8 seen and the same level the previous month, while the Caixin manufacturing PMI rose to 48.6, compared to 48.3 expected and the same level for the previous month.

In Japan, capital spending jumped 11.2%, compared to a 2.3% gain seen in the third quarter year-on-year

In Australia, the AIG manufacturing index for November reached 52.5, a jump from 50.2 last month. As well, official data showed building approvals up 3.9%, compared to a 2.3% decline seen, while the current account deficit widened to A$18.1 billion, compared to a deficit of A$16.5 billion expected. Private house approvals in Australia fell 2.1%

Overnight, gold futures posted modest gains on Monday as the dollar flirted with near 12-month highs, ahead of a flurry of comments from Federal Reserve policymakers this week before a critical rate hike decision from the U.S. central bank next month. In spite of the slight gains, gold still remained near six-year lows from earlier last week when it tested the $1,050 level. During its November swoon gold closed in the green in only eight sessions, losing roughly 8% in value for the month.

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This week, members of the Federal Open Market Committee will make close to a dozen public appearances ahead of Friday's key U.S. jobs report, the last monthly report before the FOMC decides whether to raise short-term interest rates at its two-day meeting on Dec. 15-16.

Fed chair Janet Yellen will make two appearances on Wednesday in Washington, before her testimony in front of the U.S. Senate's Joint Economic Committee on Thursday morning. Yellen could discuss the Fed's plan to gradually raise interest rates over the next year, following the initial rate hike.

Separately, Fed vice chairman Stanley Fischer is scheduled to deliver a speech on financial stability and shadow banks on Thursday afternoon at a conference hosted by the Federal Reserve Bank of Cleveland.

Investors also await Fed governor Lael Brainard's speech on Tuesday at the Stanford Institute for Economic Policy Research Associates Meeting for further indications on whether the FOMC could raise its benchmark Federal Funds Rate at the closely watched meeting.

Earlier this month, Brainard made a series of relatively dovish, market moving comments at an International Monetary Fund conference in Washington. Citing the effectiveness of unconventional, near-zero monetary policies since the Financial Crisis, Brainard warned that raising U.S. interest rates could have a cross-border spillover effect, dragging down the global economy overall.

Nearly a decade has passed since the Fed last raised its benchmark interest rate. The Federal Funds Rate, the rate banks offer on interbank, overnight loans, has remained between zero and 0.25% since December, 2008. A rate hike is viewed as bearish for gold, which struggles to compete with high-yield bearing assets.

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Elsewhere, the IMF approved a measure to include the yuan in its Special Drawing Rights (SDR) basket of reserve currencies, in a historic vote by its executive board on Monday.

While the move may have little immediate impact on inflows into the Chinese currency, it could provide China with the recognition it is seeking in becoming one of the world's top financial powers. The basket is currently composed of four currencies, the dollar, euro, British pound and Japanese yen.

China is the world's largest producer of gold and the second-largest consumer of the precious metal behind India.

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