Gold up 2% as dollar slump
Gold jumped 2 percent yesterday, hitting its highest in more than two weeks, boosted by a tumbling dollar and disappointing US manufacturing data.
The precious metal climbed and US equities fell after data showed the US manufacturing sector contracted in May for the first time in six months.
Gold and other dollar-denominated commodities gained across the board after the US dollar index dropped 1 percent against six major currencies.
"It's a currency move," said Bill O'Neill, partner of commodities investment firm LOGIC Advisors.
Spot gold was up 2 percent to $ 1,414.16 an ounce by 12:31 p.m. EDT (1631 GMT), having hit a session high of
$ 1,416.11, its highest since May 15.
US Comex gold futures rose $ 21.10 to $ 1,414.10 an ounce, with trading volume on track to finish below its 30-day average, preliminary data showed.
Analysts also cited short-covering. On Friday, bullion fell almost 2 percent, its steepest daily decline in about two weeks.
US economic data will remain in focus this week, as Friday's non-farm payroll data will provide investors with more clues about how long the Federal Reserve will keep US stimulus measures in place.
Strong physical demand appears to keep underpinning gold, with India imported a much higher-than-expected 162 tons of gold in May.
Declines in the holdings of SPDR Gold Trust GLD, the world's largest gold-backed exchange traded fund, have stopped after nearly three weeks. Holdings rose last Wednesday and have been unchanged since.
Silver jumped 3 percent to $ 22.88 an ounce on gold's rally.
Platinum rose sharply on supply worries after news of a fatal shooting at Lonmin platinum mine in top producer South Africa.
Platinum jumped 3 percent to $ 1,499.50 an ounce, while palladium rose 1.3 percent to $ 758.47 an ounce.
The platinum group metals market now digests the US auto sales data in May, as strong pickup truck sales and an improving housing market lifted results of major automakers.
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