At 11:03 a.m. EDT, gold for August delivery on the Comex division of the New York Mercantile Exchange was $8 an ounce higher at $1,544.80. The market earlier traded as low as $1,530.40.
“It’s (because of) the dollar. It’s sinking pretty sharply, especially against the Swiss franc,” said Afshin Nabavi, head of trading at MKS Finance. “That gave it the real push.”
A report on U.S. private-sector payrolls from Automatic Data Processing, which is conducted monthly just ahead of the government’s monthly employment report due out Friday, showed that private-sector non-farm jobs rose just 38,000 in May, well below the 175,000 increase expected by economists. Further, the Institute for Supply Management reported that its key manufacturing index fell to 53.5 in May from 60.4 in April, below the forecast of 57.1.
“This is a rash of bad data,” said Zachary Oxman, managing director of TrendMax Futures.
Buy stops were triggered as gold ticked above $1,540 and just above, Nabavi and Oxman said.
“We had pretty decent resistance around ($1,5)41 to ($1,5)41.50. We broke through that and ascended up three bucks very rapidly,” Oxman said. “There (were) a lot of worries about this data this morning.”
July silver remains softer, trading down 13.6 cents for the day to $38.17 an ounce. However, the metal is above its $37.525 low, and Nabavi suggested this and other commodities should benefit if the dollar remains on the defensive.
By Allen Sykora of Kitco News; asykora@kitco.com
Source: http://www.kitco.com/reports/June%2001%202011%20gold%20update.html
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