US manufacturing data sends gold price higher
The gold price had another good Monday after gaining more than $20 for a spot price of $1,264 by noon. The morning boost simmered to $1,257 by closing.
Last Monday the precious metal's spot price had a similar rally, though it reached nearly $1,270 that day.
Futures trading also rose sharply: Gold for April delivery – the most active contract – gained $18 to $1,257 on the NYMEX, nearly making up for last week's drop.
Gold bugs have the US economy to thank for the gains after the Institute for Supply Management (ISM) reported a Purchasing Managers Index (PMI) of 51.3% – down 5.3% from December's seasonally adjusted reading of 56.5%.
This level is still above the magic 50% mark which distinguishes economic expansion from contraction. The PMI – which is based on a survey of manufacturing supply managers – is considered an important indicator of the health of the US economy.
The ISM's report also noted that the manufacturing sector expanded for the eighth consecutive month in January.
George Gero, a vice president and metals strategist with RBC Capital Markets told the Wall Street Journal that some of the buying was from automatic buy orders triggered by gold's rise above $1.250 per ounce.