Gold Ends Higher On Safe Haven Appeal

September 23, 2014

San Francisco (Sept 23)  Gold futures ended higher for a second straight session on Tuesday, as investors sought the safe haven appeal of the metal even as the riskier equity assets declined globally. The precious metal also found some support with the dollar lackluster against some major currencies.

Geopolitical worries resurfaced amid reports of fresh airstrikes by the U.S. and its Arab allies on Islamic militants in Syria also contributed to bullion's uptick.

Concerns remain about the Chinese economy despite a report from Markit Economics showing the nation's manufacturing sector to have expanded at an accelerated pace in September.

Chinese Finance Minister Lou Jiwei said last week that the government may not make major policy changes despite downward pressure on economic growth.

Gold for December delivery, the most actively traded contract, gained $4.10 or 0.3 percent to settle at $1,222.00 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for December delivery scaled an intraday high of $1,237.00 and a low of $1,214.70 an ounce.

On Friday, gold futures ended higher after declining to a near 9-month low of $1,208.80 an ounce. The precious metal also found support over some disappointing economic data from the U.S. with existing home sales unexpectedly dropping and the Chicago Fed's national activity index also declining.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 774.65 tons from its previous close of 776.44 tons on Monday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.73 on Tuesday, up from its previous close of 84.70 late Monday in North American trade. The dollar scaled a high of 84.76 intraday and a low of 84.37.

The euro trended higher against the dollar at $1.2853 on Tuesday, as compared to its previous close of $1.2849 late Monday in North American trade. The euro scaled a high of $1.2901 intraday and a low of $1.2844.

In economic news from Asia, China's manufacturing sector expanded at an accelerated pace in September, coming in with a score of 50.5, the preliminary PMI reading from HSBC and Markit Economics revealed on Tuesday. That was up from 50 .2 in August.

From the eurozone, the German private sector expanded for the 17th straight month, while business confidence in France weakened slightly in September.

However, eurozone business activity in September grew at its slowest pace this year. The composite output index of the purchasing managers' survey fell to a nine-month low of 52.3 in September from 52.5 in August, preliminary data from Markit Economics showed Tuesday. The reading was expected to remain unchanged at 52.5.

Source:  RTTnews

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