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Gold remains on track to deliver gains on first day of second quarter

Published 04/03/2017, 01:54 PM
Updated 04/03/2017, 01:58 PM
© Reuters.  Gold gained more than 8% in the first quarter

© Reuters. Gold gained more than 8% in the first quarter

Investing.com - 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 for April delivery on the Comex division of the New York Mercantile Exchange added $3.55, or 0.28%, to $1,254.75 a troy ounce by 13:51 EDT.

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% decrease from the February reading of 57.7 but slightly above economists’ forecasts of 57.0.

Meanwhile, the Commerce Department said, February U.S. construction spending increased 0.8% to its highest level in more than ten years but it missed analysts’ expectations of a 1% 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% of traders expect a June rate hike.

Gold is sensitive to moves in U.S. interest rates, which lift the opportunity cost of holding non-yielding assets such as bullion.

Philadelphia Fed President Patrick Harker will speak at 3:00PM ET (19:00GMT), while Richmond Fed President Jeffrey Lacker delivers comments at 5:00PM ET (21:00GMT).

New York Federal Reserve president William Dudley, gave a speech earlier during the session but didn’t address any specifics concerning monetary policy.

Gold gained more than 8% 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.

Gold was one the few commodities that was on track to end the first day of the second quarter in positive territory as silver futures, slumped 0.29% to $18.203, a troy ounce while copper lost 1.87% to trade at $2.603

Platinum gained 0.66% to $958.70 while Natural Gas shed 1.54% to $3.141.

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