By Gina Lee
Investing.com – Gold was up on Monday morning in Asia against a weaker dollar and lower bond yields after the worlds’ largest gold consumer China released key economic data.
Gold futures edged up 0.15% to $1,908.25 by 1:49 AM ET (5:49 AM GMT), remaining above the $1,900-mark. The gold contract rolled over to the Aug 21 contract on May 30.
The dollar, which usually moves inversely to gold, inched up on Monday and the Benchmark U.S. 10-year Treasury yield fell to 1.593%.
The Chinese data said that the Manufacturing Purchasing Managers Index (PMI) was 51 and the non-manufacturing PMI was 55 in May, both remaining above the 50-mark indicating growth. However, the manufacturing PMI was slightly lower-than-expected.
In India, the second-biggest bullion consumer, physical gold demand remains low as jewelry shops remain closed amid the country’s COVID-19 outbreak.
Elsewhere in the region, the Reserve Bank of Australia will hand down its policy decision on Tuesday.
In the U.S., data released on Friday said the Core Personal Consumption Expenditure Price Index grew by a stronger-than-expected 3.1% year-on-year in April.
“Gold is pretty much drawing its strength from inflation fears and some inclination of the yields… the dollar is staying weaker that’s fairly supportive. Gold bulls now have their eyes set on $2,000 and most of the guys are thinking it’s going to go quite higher,” Stephen Innes, managing partner at SPI Asset Management, told Reuters.
Investors now await key U.S. economic data for May, including the Institute of Supply Management (ISM) manufacturing PMI, to be released on Tuesday. Further data, including non-farm payrolls and the unemployment rate, is due on Friday.
They also digested President Joe Biden’s proposed $6 trillion budget plan for the fiscal year 2022 to invest in infrastructure, education, and combating climate change that was unveiled on Friday.
In other precious metals, palladium edged down 0.2, while silver edged up 0.2% and platinum rose 0.5%.