rexpros - Gold futures slipped lower Thursday, as investors flocked to the relatively safety of the U.S. dollar following the release of a spate of weaker-than-expected U.S. economic data.
On the Comex division of the New York Mercantile Exchange, gold futures for August delivery traded at USD1,564.35 a troy ounce during U.S. afternoon trade, easing lower by 0.09%.
It earlier rose by as much as 0.55% to trade at a two-day high of USD1,574.05 a troy ounce.
Gold futures were likely to find near-term support at USD1,532.55 a troy ounce, the previous day’s low and resistance at USD1,585.65, the high from May 28.
Gold’s losses accelerated shortly after the release of the Chicago PMI data, with prices dropping from the daily high of USD1,574 to a session low of USD1,553 in a matter of minutes.
In a report, market research group Kingsbury International said that manufacturing activity in the Chicago area slowed to 52.7 in May from April’s reading of 56.2. It was the lowest level since September 2009.
The data came after the U.S. Commerce Department said that the U.S. economy grew at a slower rate than initially estimated during the first three months of 2012, as consumer spending figures were revised lower.
U.S. gross domestic product increased at a seasonally adjusted annual rate of 1.9% during the first quarter, in line with expectations and down from a preliminary estimate of 2.2%.
The data primarily reflects a downward revision to personal consumption, which grew 2.7% compared to a previous estimate of 2.9%. Consumer spending typically accounts for nearly 70% of U.S. economic growth.
Meanwhile, concerns over the strength of the U.S. labor market grew after weekly data from the U.S. Department of Labor showed that the number of individuals filing for initial jobless benefits rose by 10,000 to 383,000 last week, defying expectations for a decline of 3,000 to 370,000.
The report followed data from payroll processing firm ADP, which said non-farm private employment rose by 133,000 in May, missing expectations for an increase of 148,000.
Attention now shifts towards U.S. employment data on Friday. The non-farm payrolls report is expected to show the world's largest economy added 150,000 new jobs in May.
Gold investors will be closely watching U.S. data in the second quarter for clues as to the likelihood of a fresh round of monetary easing by the Federal Reserve, which could potentially hurt the dollar and support gold.
Elsewhere, concerns remained over Spain’s deteriorating financial situation, where rising bond yields, the growing costs of bank rescues and a recession hit economy fuelled fears that Madrid will be forced to seek an international bailout.
Gold futures rose 1% on Wednesday, bucking the downtrend across most of the commodity markets, as traders noted strong technical buying interest after prices failed to break below resistance near USD1,530 an ounce.
It was the third time in the past ten session that the market failed to break below the USD1,530-level, prompting bargain hunters reluctant to bet that prices will fall further to enter the market.
Global equities and commodity markets have been rattled in recent weeks as fears over the possibility of a Greek exit from the euro zone and growing concerns Spain will be the next euro zone member to require a bailout dominated market sentiment.
For the month, gold is trading down 6%, its fourth straight monthly decline, the longest stretch since January 2000.
Elsewhere on the Comex, silver for July delivery fell 0.70% to trade at USD27.78 a troy ounce, while copper for July delivery tumbled 0.64% to trade at USD3.368 a pound.
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