Precious metals gain

Prices rise as initial claims rise

Bullion metal prices ended higher on Thursday, 22 August 2013. December gold and September silver rose to their respective session highs of $1381.40 and $23.33 per ounce after data released this morning showed the initial claims level rose to 336,000 for the week ending 17 August from an upwardly revised 323,000 for the week ending Aug 10. However, both metals pulled-back as they headed into afternoon floor trade.

Gold settled just 60 cents higher at $1370.60 per ounce while silver closed at $23.03 per ounce, booking a 0.3% gain.

Chinese manufacturing data Thursday showed improvement from the prior month. The HSBC purchasing managers index rose to 50.1 in August from 47.7 in July. A reading over 50.0 suggests economic growth. The China data was a bullish factor for the precious metals markets on Thursday. China is the world's second-largest economy, but the leading worldwide importer of many key raw commodities. The China data somewhat assuaged the Asian markets, but the concerns of an Asian contagion outweighed the positive China data.

Traders and investors have moved the ongoing Egypt unrest to the back burner for the moment, as there are no major, new developments there. However, any escalation in violence is likely to impact the market place, and could also prompt a rise in demand for safe-haven assets, including gold.

Investors received a handful of economic data today at Wall Street. The initial claims level rose to 336,000 for the week ending August 17 from an upwardly revised 323,000 (from 320,000) for the week ending August 10. The consensus expected the initial claims level to increase to 337,000. The upward move in the initial claims level is likely just normal volatility. Over the past four weeks, moving average for initial claims has dropped to its lowest level since November 2007.

Separately, the Conference Board's Index of Leading Indicators increased 0.6% in July after holding flat in June. That was the strongest increase since increasing 0.8% in April. The consensus expected the index to increase 0.5%.

Lastly, the June FHFA Housing Price Index rose 0.7% to follow last month's 0.8% increase.

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