Capital Gold Group Report: Gold Strong - US Economic Data Weak
Gold futures rise on lackluster U.S. economic data
Gold for June delivery surged $13.50 to close at $880 an ounce on the
New York Mercantile Exchange. It reached an intraday high of $888.
The price of the contract fell $3.10 on Wednesday. It dropped $19.30, or 2.2%, between May 9 and Wednesday.
"Gold surged initially on technical buying and short covering prior to
weak data in the form of Empire and Philly Federal Reserve indices,
industrial production, weekly jobless claims and the TICs data -- all
of which were neutral to negative, which exacerbated the move to the
upside" for gold, said Mark O'Byrne, a director at Gold and Silver
Investments Ltd.
The U.S.
Treasury released its monthly TICS capital flow data Thursday, which
showed that net overall capital flows reversed "sharply" in March to
show an outflow of $48.2 billion after a revised $48.9 billion inflow
in February, he said. The data was "dollar bearish and gold bullish."
Dollar mixes it up
In other economic news, the Labor Department reported that the number
of people filing for first-time unemployment benefits rose 6,000 to
371,000, on a seasonally adjusted basis, in the week ended May 10.
The four-week average of initial claims, which smoothes out one-time
factors such as bad weather or holidays, fell 1,000 to 365,750. "The initial jobless
claims were higher than expected, while New York area manufacturing
activity came in lower than anticipated," said Jon Nadler, senior
analyst.
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