Gold futures retreated in electronic trading Thursday, matching falls across commodity markets, as the U.S. dollar turned higher and data showed manufacturing activity in China remained weak in September.
Extending losses seen during the Asian session, gold for December delivery GCZ2 dropped $7.30, or 0.4%, to at $1,764.50 an ounce during European trading hours.
In the past month, the metal has shot up more than 9% as action by global central banks to ease monetary policy spurred buying interest. Policy easing tends to be positive for prices, as gold is viewed as a safe store of value and benefits amid fears of currency debasement
Investors were evaluating the possibility of more stimulus for the Chinese economy as preliminary September data released by HSBC on Thursday showed manufacturing activity in the country contracted for the 11th straight month in September. Read more on China’s HSBC PMI.
“Pressure is building on China to make the next move to provide stimulus to boost its slowing economy. A further contraction in its vast manufacturing sector could finally trigger action from Beijing,” Lynette Tan, precious-metals analyst at Phillip Futures in Singapore, said in a note to clients.
Gold was also pressured by a higher dollar. The dollar index DXY, which tracks the greenback against six other major currencies, rose to 79.525 from 79.071 in late North American trading on Wednesday.
A stronger greenback tends to be negative for dollar-denominated metals as it makes them more expensive to holders of other currencies.
The broader metals complex tracked gold lower, with copper leading the declines.
European stocks traded lower, tracking losses in Asia where the Shanghai Composite Index 000001 closed down 2.1%, its lowest close since Feb. 2, 2009.
Copper for December deliveryHGZ2 dropped 7 cents, or 1.9%, to $3.76 a pound, after hitting levels in Wednesday’s trading session not seen since May.
October platinum PLV2 tumbled, losing $39, or 2.4%, to $1,601.30 an ounce. Palladium for December delivery PAZ2 dropped $11.25, or 1.7%, to $661.860 an ounce.
Silver for delivery the same month SIZ2 shed 24 cents, or 0.7%, to $34.35 an ounce, trading at levels not seen since March.
Marketwatch
