Moderate gains for bullions

Gold ends at its highest close in three weeks

Bullion prices ended moderately higher at Comex on Monday, 05 May 2014. Gold futures rode investor fears over increased unrest in Ukraine on Monday and got an additional boost from some weakness in U.S. equities, sending prices for the precious metal to their highest close in three weeks. But better-than-expected data on U.S. service-sector growth helped keep price gains in check.

Gold for June delivery rose $6.40, or 0.5%, to settle at $1,309.30 an ounce on the Comex division of the New York Mercantile Exchange.

July silver rose 2.5 cents, or 0.1%, to $19.57 an ounce.

The Russia-Ukraine crisis has ratcheted up, which is not surprising. This follows clashes on Friday and Saturday in parts of Ukraine that saw dozens of people killed.

Asian stock markets saw some selling pressure on Monday following downbeat manufacturing data coming out of China, which has the world's second-largest economy. The HSBC final purchasing managers' index for China was 48.1 in April versus the preliminary reading of 48.3 and a reading of 48.0 in March. A number below 50.0 suggests contraction in the manufacturing sector.

In other news on Monday, the European Union's producer prices fell for the third month in a row in Marchdown 0.2% from February and down 1.6% from a year ago. The specter of price deflation is gripping the EU at present, which is likely to prompt the European Central Bank to soon announce some type of further monetary policy stimulus measures. The ECB holds its monthly monetary policy meeting on Thursday.

Among economic data expected at Wall Street today, the ISM Non-manufacturing Index increased to 55.2 in April from 53.1 in March. That was the strongest reading since August 2013, while the consensus expected the index to increase to 54.0. Business activities/production levels improved to 60.9 in April from 53.4 in March. The increase in production was predicated on a large increase in new orders (58.2 from 53.4). There is some concern that production may not be sustainable without another influx of new orders growth. Order backlogs slipped into a contraction in April (49.0 from 51.5). The Employment Index fell to 51.3 in April from 53.6 in March, which was unusual considering the April Employment Situation Report showcased a large increase in payrolls that month.

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