Prices of gold futures rose on Friday, hovering near 27-month high, and silver on track for its best week since August 2013 boosted by dollar weakness as a safe haven asset continued to be in demand despite an increase in risk appetite back to Brexit vote. In addition to soft production data in China and other cues of a rise in interest rates delayed by the Federal Reserve boosted the yellow metal.
On the Comex Gold for August delivery traded between $1,323.00 and $1,344.25 an ounce, up $18.40 or 1.39% on the session. On Thursday, Gold ended the first six months of 2016 up nearly 25%, completing one of its strongest first halves on record.
Spot gold was up 0.6 per cent at $1,329.66 an ounce. The yellow metal registered its biggest monthly rise since February in June and was up 1 per cent for the week so far.
Silver breached the $19 level to reach the highest since September 2014. Silver, which has gained more than 8 per cent this week, is on track for its best week since August 2013.
In China, the rate of Caixin manufacturing purchasing managers fell from 0.6 48.6 in June fell to its fastest pace in four months. It came as new orders moved lower for the month and companies cut staff levels at a solid pace sector.
Analysts had expected a reading of 49.1 see the same time, government officials Manufacturing PMI marked by a 0.1 to 50.0, falling to its lowest level since February reading of 49.0. Any reading below 50.0 provides signals contraction in the industry.
Chinese government official reading serves as an indicator of activity among large enterprises and state sector. China is the world’s largest gold producer and second largest consumer of the precious metal after India.
The dollar fell against the yen and down against a basket of six currencies and Asian stocks rose on Friday as risk appetite continued to recover from Brexit crash last week.
Global inventories rose on Thursday after the Bank of England Mark Carney said the central bank would probably need to pump more stimulus for the economy in the UK during the summer after the shock decision last week by the voters to left EU.
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