Gold futures on the COMEX division of the New York Mercantile Exchange fell on Wednesday as positive U.S. data encouraged investors.
The most active gold contract for August delivery fell 2.80 U.S. dollars, or 0.23 percent, to settle at 1,214.70 dollars per ounce.
A report released on Wednesday by the U.S.-based Institute for Supply Management showed its key ISM manufacturing index increasing by 0.5 points to a better-than-expected 51.3 points during the month of May. Analysts noted that deliveries increased by 5 points to 54.1 which they say is usually a sign of strong demand.
Traders are waiting for the release of the weekly jobless claims report due on Thursday, and also the international trade report and big employment situation report due on Friday. Investors will be carefully watching the big jobs report on Friday because it will likely have a large impact on the thinking of the Federal Reserve during the June Federal Open Market Committee (FOMC) meeting.
Gold ended the U.S. day session with modest losses in a choppy, two-sided trading affair Wednesday. Some short covering in the futures market and some bargain hunting in the cash market lifted prices early on. However, upbeat U.S. economic data released later in the morning helped to drag prices down from their daily highs. August Comex gold was last down $2.50 an ounce at $1,214.90. July Comex silver was last down $0.044 at $15.945 an ounce.
Selling pressure in gold Wednesday was mitigated by losses in the U.S. dollar index. The other key outside market saw Nymex crude oil prices trading slightly lower in afternoon dealings.
In overnight news, China’s official purchasing managers’ index (PMI) came in at 50.1 in May. The Caixin manufacturing PMI came in at 49.2 versus 49.4 in April. A reading above 50.0 suggests expansion in the sector. The news was deemed slightly downbeat and Asian stock markets saw some selling pressure on the data.
Technically, August gold futures prices closed near mid-range today. The gold bulls and bears are on a level overall near-term technical playing field as bulls have faded badly recently. Prices are in a four-week-old downtrend on the daily bar chart. Gold bulls’ next upside near-term price breakout objective is to produce a close above solid technical resistance at $1,250.00. Bears' next near-term downside price breakout objective is pushing prices below solid technical support at 1,200.00. First resistance is seen at today’s high of $1,222.90 and then at $1,230.00. First support is seen at $1,207.70 and then at $1,200.00. Wyckoff’s Market Rating: 5.0
Reference: Xinhua, Reuters
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