Gold Futures Recoup Losses Amid Strong Economic Data

Strategic Insights -

September 1, 2009 marked a crucial day in the commodities market as gold futures experienced a significant rebound in response to stronger economic data and investor concerns about rising prices. The December gold contract rose $3 to settle at $956.50 an ounce on the Comex division of the New York Mercantile Exchange, as investors sought to hedge against inflation and a decline in equities. Meanwhile, silver futures also gained traction, with Comex December silver rising 13.7 cents to settle at $15.06 an ounce. However, platinum group metals declined as participants sold bullish positions, citing easing concerns on labor tensions among South African miners.

Key Takeaways:

  • Gold futures rebounded $3 to settle at $956.50 an ounce on the Comex division of the New York Mercantile Exchange, with December gold leading the charge.
  • The Institute for Supply Management reported its manufacturing index for August at 52.9, a significant increase from 48.9 in July and 44.8 in June, showing U.S. factory activity expanded for the first time since January 2008.
  • Pending home sales climbed 3.2% in July to the highest level in more than two years, according to the National Association of Realtors.
  • Charles Nedoss, senior account manager and metals analyst with Peak Trading Group, noted that the strong economic data prompted some participants to buy gold as a hedge against rising prices.
  • Sterling Smith, market analyst at Country Hedging, attributed the safe-haven buying to stock market fears and concerns about equities' performance during September and October.
  • Silver rose slightly more than gold in percentage terms, with Smith citing the metal's relatively low price compared to gold as a factor.
  • Platinum group metals declined as participants sold bullish positions, with Nymex October platinum falling $17.20 to settle at $1,226.80 an ounce and December palladium declining $4.05 to settle at $289.45 an ounce.

Statistics:

  • December gold futures rose $3 to settle at $956.50 an ounce.
  • Comex December silver gained 13.7 cents to settle at $15.06 an ounce.
  • The Institute for Supply Management's manufacturing index for August rose to 52.9, a 4.1-point increase from July.
  • Pending home sales climbed 3.2% in July to the highest level in more than two years.
  • September 1, 2009 - Nymex October platinum fell $17.20 to settle at $1,226.80 an ounce.

Sources:

  • Dow Jones Commodities News via Comtex
  • RBC Capital Markets Global Futures
  • Institute for Supply Management
  • National Association of Realtors
  • Peak Trading Group
  • Country Hedging
  • Dow Jones Newswires
  • Dow Jones & Company, Inc.