Gold Futures Settle Marginally Up

Gold futures settled slightly higher on Monday after data showed an unexpected drop in manufacturing sector activity in the U.S. in June.

The dollar’s retreat after the ISM report helped gold’s uptick. The dollar index, which climbed to 103.27 in the Asian session, dropped to 102.75 around mid morning, before recovering to around 103.00.

Gold futures for August ended higher by $1.40 at $1,930.80 an ounce.

Silver futures for September gained $0.080 at $1,226.00 an ounce, while Copper futures for September settled at about $3.7900 per pound, gaining $0.0300.

“Gold prices are steadying following disappointing global PMI data and on expectations the US economic outlook could start to deteriorate more quickly,” says Edward Moya, Senior Market Analyst at OANDA. “Gold should find a home above the $1900 level on weaker growth expectations following the headlines on student loan debt, tougher times for small and medium size businesses, and potentially a stop and go Fed rate hiking cycle,” he adds.

Data from the Institute for Supply Management showed manufacturing activity in the U.S. unexpectedly contracted at a slightly faster rate in the month of June.

The ISM said its manufacturing PMI edged down to 46.0 in June from 46.9 in May, with a reading below 50 indicating contraction. The dip surprised economists, who had expected the index to inch up to 47.2.

In China, a private survey showed activity in the nation’s manufacturing sector slowed in June.

The Caixin/S&P Global manufacturing purchasing managers’ index dropped to 50.5 from 50.9 in May, raising calls for more stimulus to boost growth in the world’s second-largest economy.

Meanwhile, business surveys from other parts of Asia and Europe also painted a gloomy picture.

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