Investing.com – Gold dipped as China reported better than expected PMI figures for May on Wednesday, lifting copper slightly on expected continued growth.
for June delivery on the Comex division of the New York Mercantile Exchange fell 0.16% to $ 1,260.11, while on the Comex edged up 0.12% to $ 2.573 a pound.
China reported official for May at 51.2, compared with a level of 51.0 seen, and steady with 51.2 in April. The came in at 54.5, up from a level last at 54.0 in April. A figure above 50 denotes expansion. The private from Caixin is due on Thursday.
Overnight, gold retreated from a one-month high, despite an increase in safe haven demand amid ongoing geopolitical concerns in Europe while hawkish comments concerning U.S. interest rates from a top Fed official capped upside momentum.
Gold prices dipped at the start of European trade on Tuesday, as concerns about geopolitical uncertainty in Europe eased somewhat, following the release of the ICM poll for The Guardian, showing the Conservative Party held a healthy lead of 45% compared to Labour’s 33%, ahead of the general election scheduled for June 8.
Elsewhere in Europe, however, Eurozone finance ministers’ failure to agree on Greek debt relief with the International Monetary Fund last week, and the prospect of early elections in Italy increased demand for safe haven gold, which limited losses.
Former Italian prime minister Matteo Renzi suggested on Sunday that the country’s next election be held at the same time as Germany’s election, September 24, adding to speculation that Italians could head to the polls in the autumn.
In the mid-afternoon U.S. session, investors parsed Federal Reserve Governor Lael Brainard’s comments that an interest rate hike is “likely appropriate soon” but reaction in gold prices were muted, as Brainard warned that the Fed may delay an interest rate hike should inflation continue to slow.
According to investing.com’s over 80% of traders expect the Fed to hike its benchmark rate in June from 0.75-1% to 1-1.25%.
Gold is sensitive to moves higher in both U.S. rates and the dollar – A stronger dollar makes gold more expensive for holders of foreign currency while a rise in U.S. rates, lift the opportunity cost of holding non-yielding assets such as bullion.
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