Gold Prices Rally as Data Disappoints
Source: The Street, Alix Steel (6/1/11)
"Trading quickly quickly reversed course after a slew of disappointing data."
Gold was moving higher Wednesday while silver prices fell after a disappointing jobs picture in the U.S. and a negative manufacturing reading.
Gold for June delivery was adding $6.90 to $1,543.70 an ounce at the Comex division of the New York Mercantile Exchange. The metal was initially trading lower as investors were opting for stocks after markets ended May with a bang, but quickly reversed course after a slew of disappointing data from the U.S. Gold has traded as high as $1,545.50 and as low as $1,530.40 while the spot gold price was up $9.50 according to Kitco's gold index.
Silver prices were stemming losses but were still $0.27 lower to $38.03 an ounce while the U.S. dollar index was slightly lower at $74.46.
Gold and silver prices were diverging after the ADP employment report said that only 38,000 jobs were added in May and April's figure was revised down by 2,000 to 177,000. The news sparked more interest in gold as a safe haven asset, which was underscored by weak manufacturing numbers from China, the Eurozone and U.S. Slowing manufacturing data worldwide curbed demand for silver, primarily an industrial metal.
Investors are also considering whether Germany will allow Greece to secure an additional €60 billion, that's on top of the country's current €110 billion bailout, without asking bondholders to delay getting their money back. If that happens, Greece could avert a default and help cheer investors.