Gold edges higher after disappointing US economic data

Commodities & Futures
© Reuters.  Gold prices remained on track to snap a two-day losing streak on Wednesday© Reuters. Gold prices remained on track to snap a two-day losing streak on Wednesday

Investing.com – Gold edged higher on Wednesday, as signs of weakness in the U.S. economy spurred safe haven demand after both manufacturing and housing data fell short of expectations.

for June delivery on the Comex division of the New York Mercantile Exchange rose $ 9.57 or 0.76%, to $ 1,271.69 a troy ounce by 13:59 EDT.

Gold prices remained on track to snap a two-day losing streak, as investors piled into safe haven gold amid a downturn U.S. Midwest manufacturing and pending home sales.

The Chicago Purchasing Management Index, also known as the Chicago Business Barometer, fell to 55.2 in May from its strongest level in more than two years. Analysts had expected a reading of 57.0 for May.

In a separate report, The National Association Realtors said U.S. pending home sales, a forward looking measure of US home sales, in April, as tightening in the number of homes available for sale continued to weigh on U.S. pending home sales.

The soft duo of economic results came ahead of the release of the , a report on current economic conditions in each of the 12 Federal districts in the U.S, which serves as a prelude to the Federal Open Market Committee meeting in June.

Geopolitical uncertainty and a continued slide in dollar, has emboldened demand for safe haven gold, despite rising expectations that the Federal Reserve is poised to hike interest rate in June.

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%.

The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, fell by 0.33% to 96.90, in the late afternoon U.S. session.

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.

Other precious metals failed to capitalize on dollar weakness, as fell 0.59% to $ 17.324 a troy ounce while rose 1.18% to trade at $ 952.10.

added 0.74% to $ 2.583, while fell by 2.38% to $ 3.070.

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