Gold futures fall after upbeat U.S., China data

 By Carla Mozee and Barbara Kollmeyer, MarketWatch 

LOS ANGELES (MarketWatch) — Gold prices finished lower Thursday after data from China and the U.S. pointed to improvement in the global economy. 

Gold for December delivery GCZ2 -0.15%  fell $3.60, or 0.2%, to settle at $1,715.50 an ounce on the Comex division of the New York Mercantile Exchange. Read: Gold gains as floor trading reopens.

Gold lost earlier gains after the Conference Board said its consumer-confidence index rose to the highest level since 2008. Read: Consumer-confidence gauge highest since 2008 

 

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The confidence report was part of a string of economic figures released Thursday that were largely upbeat, and in the wake of those came “a stronger equity market, and that isn’t helping gold,” said Frank Lesh, broker and futures analyst with FuturePath Trading in Chicago. 

The Institute for Supply Management’s index of purchasing managers rose above Wall Street’s expectations. Also, payroll-processing firm ADP said 158,000 private-sector jobs were created in October, and the U.S. government said weekly applications for unemployment benefits fell by 9,000. Read: Private-sector jobs rise by 158,000. 

 

On Wall Street, the Dow Jones Industrial Average DJIA +0.98%  jumped 106 points and the S&P 500 index SPX +1.01%  advanced 0.8%. See: U.S. stocks gain on upbeat economic data.

 

The jobs data arrived a day ahead of the U.S. Labor Department’s nonfarm payrolls report for October. 

Gold futures fell on Thursday, as the dollar posted small gains. A higher dollar tends to weigh on dollar-denominated commodities such as gold, since it makes them more expensive for holders of other currencies. 

The ICE dollar index DXY +0.12% , which measures the dollar against a basket of six major rivals, traded at 80.084 compared with 79.903 in North American trade late Wednesday. 

There was “low participation” in the gold market Thursday ahead of the October jobs report, said FuturePath Trading’s Lesh. 

But it is “the [presidential] election, more than anything else, that’s kept some capital away from the market at the moment,” he noted. 

In China, two manufacturing surveys showed signs of economic recovery. More about Chinese PMI surveys. 

 

“There are thus increasing signs of the Chinese economy gathering pace again — indeed, we believe it may already have bottomed out,” analysts at Commerzbank wrote in a note. 

“More robust economic growth again, supported among other things by numerous infrastructure projects, is likely to spark solid demand for commodities in general and for metals in particular,” they said. 

Strategists at HSBC said there were other reasons to be hopeful of support for gold prices. 

“Gold prices are likely to move higher in the short term and may be helped by a pickup in Indian festive buying ahead of Diwali and the Indian wedding season, we believe,” strategists at HSBC wrote in a report. 

The HSBC strategists said gold could see more upside after managing to stay above the $1,700-an-ounce mark. 

Gold closed October with a loss of 3.1%, according to FactSet data which logged gold’s settlement on Sept. 28 at $1,773.90. It was the first monthly decline for the metal since May. 

In other trading, December silver futures SIZ2 -0.10%  fell 7 cents to end at $32.25 an ounce while December copper futures HGZ2 +1.01%  rose 3 cents, or 1%, to $3.55 per pound. 

Platinum for December delivery PLZ2 -1.02%  declined $4.80 to $1,572.70 an ounce, while January palladium PAF3 +1.82%  rose $2.75, or 0.5%, to $615.40 an ounce. 

Carla Mozee is a reporter for MarketWatch, based in Los Angeles. Barbara Kollmeyer is an editor for MarketWatch in Madrid.