21.08.2015 20:12:11

Gold Ends Higher On Safe Haven Appeal As Global Equities Slump

(RTTNews) - Gold futures ended higher for a third straight session on Friday, with investors seeking the safe haven appeal of the precious metal as the riskier equity assets continued to decline sharply globally on mounting evidence that China is having a rough patch economically.

For the week, gold futures gained about 4.2 percent.

Some weak manufacturing data from China and the continued sell-off in the Chinese stock market added to the negative mood. Concerns about the outlook for the global economy continues to weigh on investor sentiment, after the Shanghai Composite Index plunged by another 4.3 percent.

A preliminary survey by Markit and Caixin on Friday showed manufacturing activity in China to have slipped to a 6-1/2 year low. The Caixin manufacturing PMI declined to 47.1 in August from 47.8 in July.

China's economic woes have been putting pressure on global stocks and has helped raise gold's safe haven appeal.

Gold for December delivery, the most actively traded contract, gained $6.40 or 0.6 percent, to settle at $1,159.60 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,167.90 and a low of $1,148.50 an ounce.

On Thursday, gold prices for December delivery surged $25.30 or 2.2 percent, to settle at $1,153.20 an ounce, on its safe haven appeal after global equity markets witnessed a massive sell-off with China in focus.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to 675.44 tons on Friday from its prior close of 671.87 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.98 on Friday, down from its previous close of 95.77 in late North American trade on Thursday. The dollar scaled a high of 95.82 intraday and a low of 94.84.

The euro trended higher against the dollar at $1.1362 on Friday, as compared to its previous close of $1.1241 in North American trade late Thursday. The euro scaled a high of $1.1378 intraday and a low of $1.1230.

On the economic front, the manufacturing sector in China continued to struggle in August as the contraction accelerated, a preliminary survey from Caixin showed on Friday, with a Performance of Manufacturing Index score of 47.1. That's down from 47.8 in July, and it represents a 77-month low.

Eurozone consumer confidence strengthened for the first time in five months during August, preliminary data from the European Commission revealed Friday. The flash consumer confidence index for the euro area rose to -6.8 from July's -7.1. Economists had expected a -6.9 reading.

Eurozone private sector growth improved in August underpinned by German activity, while the expansion in France eased to a four-month low, signaling the widening divergence between two largest euro area economies. The flash Purchasing Managers' Index ticked higher to 54.1 from July's final reading of 53.9 and remained at an expansionary level for the twenty-sixth successive month, preliminary data from Markit Economics showed Friday.

Germany's private sector grew at the fastest pace in four months in August, flash survey data from Markit revealed Friday. The flash composite output index rose to 54 in August from 53.7 in July. The reading reached a 4-month high in August.

German consumer sentiment is set to drop unexpectedly in September, as economic and income expectations floundered despite Greece reaching an agreement on a controversial debt deal. The forward-looking consumer sentiment index fell to 9.9 in September from 10.1 in August, survey data from market research group GfK showed Friday. Economists had forecast it to remain unchanged at 10.1.

The U.K. logged its first July budget surplus since 2012, the Office for National Statistics showed Friday. Public sector net borrowing excluding public sector banks decreased by GBP 1.4 billion to a surplus of GBP 1.3 billion or equivalent to -0.1 percent of gross domestic product in July. This was the first reported July surplus since 2012. Economists had forecast a surplus of GBP 1.1 billion.

British house price sentiment index, or HPSI, rose to 59.5 in August from 58.6 in the previous month. This marked the twenty-ninth successive month of the index remaining above 50.

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