Gold futures is negatively quoted on Monday stabilized near $1,280 an ounce despite data showing that US personnel spending fell for the first time in 20 months in December amid a weak outlook for the global economy retains bullion’s safe-haven draw.
Weekend data showed China’s manufacturing sector contraction in January for the first time since 2012. This report came shortly after US GDP number on Friday marked a sharp deceleration during the fourth quarter.
The US DOC said personal expenditures fell 0.3% in December, worse than expectations for a decline of 0.2%. Consumer spending is the major source of economic growth, accounting for two thirds of the economic activity.
The report also showed that personal income rose 0.3% in December, above expectations of 0.2%.
On the Comex, gold futures for April delivery settled yield $7.00, or 0.55%, to trade at $1272.20 a troy ounce. Prices held within a range of $1271.30 and $1283.90.
Spot gold was beyond 0.3 percent at $1,279.18 an ounce after rising 2 percent on Friday. January was terminated with a gain of 8.4 percent, its biggest monthly increase since January 2012.
China’s manufacturing sector unexpectedly contracted for the first time in nearly 30 months during January and companies see darkness ahead, raising hopes that politicians will do more to avoid a sharper slowdown.
Gold steady tone is also endorsed by strong inflows into exchange-traded funds.
SPDR Gold holdings amounted to 24.4 million ounces Until Thursday, the highest since mid-October.
The Federal Reserve uses core PCE as a tool to assist in determining whether to raise or lower interest rates, with the objective of maintaining inflation at a rate of 2% or less.
On Friday, gold was recovered $23.30, or 1.86%, to settle at $ 1279.20 after data showed the US economy grew less than expected during the fourth quarter.
The dollar index, which measures the US currency’s strength against major currencies, was trading at 94.66, down 0.15%.
In the morning, At the Multi Commodity Exchange, Gold April contract trades higher at Rs 27834 up Rs 62, or 0.22 percent.
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