Gold prices rose moderately with spot gold, after tracking oil and equities higher as optimistic U.S. and China manufacturing data cast a shadow on disappointing numbers from the Euro zone. Stronger U.S. manufacturing data as well as strong China official PMI value pushed Wall Street to a high, and helped lift spot gold prices nearly half a percent. Recent fundamental aspects that are reflecting gold price movement are:

Economy

Federal Reserve also signalled little eagerness for further monetary steps to stimulate U.S. growth in an economy that is gradually strengthening, maintaining low interest rate and keeping the opportunity cost of holding gold low.

The European Central Bank (ECB) is also expected to come up with supportive policy for euro zone economy keeping interest rates unchanged at a policy meeting on Wednesday.

Stock

U.S. stocks started the second quarter with positive vibes with the S&P 500 climbing to a high as manufacturing data from the United States and China helped support the outlook for economic growth. NASDAQ also compounded up by 1 percent. Signs of improvement in the U.S. economy have clouded up the picture for gold. 

Currency

The Japanese Yen held firm in Asia as investors cut back on short positions, while unexciting Euro zone manufacturing and jobs data kept a restraint on the Euro. The dollar index hovered above a very near to a 1% high than the lowest value after the euro rally on hopes that Spain could stick to an austerity plan.   

Oil

U.S. crude futures also rose more than 2 percent as the upbeat U.S. data and delays for North Sea oil cargoes countered disappointing figures from Europe. A more than 2-percent jump in oil prices also underpinned the sentiment in bullion.

Note: This blog is just an expression of the author’s opinion and cannot be deemed responsible for any losses incurred.