Moderate gains for bullions

Weaker-than-expected data on manufacturing activity impact prices

Bullion prices ended with moderate gains on Tuesday, 18 February 2014. Gold futures posted modest gains after weaker-than-expected data on manufacturing activity in the New York area underlined concerns about the momentum of the economic recovery.

April gold rose $5.80, or 0.4%, to close at 1,324 an ounce in floor trading at the Comex division of the New York Mercantile Exchange.

March silver gained 48 cents to trade at $21.90 an ounce.

A weaker U.S. dollar index was also a bullish underlying factor for the precious metals markets Tuesday, and bullish for the raw commodity sector, in general. It's been a calm trading week so far, with U.S. traders and investors coming back from a three-day holiday weekend on Tuesday. In overnight news, the Bank of Japan made a de facto monetary policy stimulus move Tuesday following weak gross domestic product data released Monday. The BOJ offered incentives to Japanese banks to lend more money.

Meantime, there was upbeat economic data coming out of China as foreign investment in the world's most populous nation and the world's second-largest economy rose during the month of January. That's a bullish underlying factor for the raw commodity sector, too.

U.S. economic data released Tuesday included the Empire State manufacturing survey, Treasury international capital data, and the NAHB housing market index. The February NAHB Housing Market Index fell to 46 from 56 while the consensus expected the reading to hold at 56.

The Empire Manufacturing Survey for February registered a reading of 4.5, which was down from the prior month's unrevised reading of 12.5. Market expected the survey to decline to 7.5. Lastly, the December net long-term TIC flows report indicated a $45.9 billion outflow of foreign capital from U.S. denominated assets. This followed the prior month's $28.0 billion outflow.

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