Tuesday, May 01, 2012
--Comex June gold down 0.1% to $1,662.40/oz
--Stronger ISM manufacturing PMI dents gold, boosts dollar
--BNP Paribas cuts gold price outlook for 2012, 2013
By Tatyana Shumsky
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--Gold futures edged lower Tuesday on stronger-than-expected manufacturing data from the U.S., which helped the dollar shake off losses against other currencies.
The most actively traded contract, for June delivery, settled down $1.80, or 0.1%, at $1,662.40 a troy ounce on the Comex division of the New York Mercantile Exchange.
The Institute of Supply Management's manufacturing gauge showed expansion in the sector picked up in April. The ISM's manufacturing purchasing managers' index rose to 54.8 from 53.4 in March, beating forecasts of a slump to 52.9.
"Gold is down slightly on higher than anticipated ISM data on manufacturing," Jeffrey Wright, managing director with Global Hunter Securities, said in a note. "Looking beyond today, we believe gold has established a lower limit to the current trading range in the $1625 area, with the next move for gold being modestly higher."
Gold prices are vulnerable to stronger economic data as continued growth damps the chances of a third round of monetary stimulus--widely seen as the necessary trigger for gold to rally back toward record highs.
Analysts at BNP Paribas cut their gold price outlook for 2012, citing a shift in the bank's forecast of Federal Reserve monetary policy. Bullion prices should average $1,715 this year, down from earlier forecasts of $1,855, analyst Anne-Laure Tremblay said in a research note. In 2013, gold prices should average $1,960, down from earlier forecasts of $2,225.
BNP Paribas now expects further monetary accommodation to be implemented only in the final quarter of 2012, instead of June.
"This change has significant implications for our gold price forecasts (and by extension for our silver price forecasts), given gold's tight positive relation with the level of market liquidity," Tremblay said. She added that a fresh record high in gold is now delayed until 2013.
Elsewhere, the upbeat U.S. data gave the greenback a boost against other currencies, further weighing on gold. Gold futures are priced in dollars and seem more expensive to buyers who hold other currencies.
The ICE Dollar Index was recently at 78.873, up from 78.603 earlier.
Settlements (ranges include open-outcry and electronic trading):
London PM Gold Fix: $1,664.00; previous PM $1,651.25
Jun gold $1,662.40, down $1.80; Range $1,657.50-$1,672.30
Jul silver $30.930, down 8.6 cents; Range $30.790-$31.365
Jul platinum $1,572.30, up $0.40; Range $1,560.40-$1,578.60
Jun palladium $681.05, up $1.30; Range $675.90-$686.20
-By Tatyana Shumsky, Dow Jones Newswires; 212-416-3095; tatyana.shumsky@dowjones.com
--Matt Day contributed to this article.
(END) Dow Jones Newswires
May 01, 2012 14:50 ET (18:50 GMT)
