Civil war in Iraq remains a bullish market factor for safe-haven gold
It was mixed finish for bullions on Monday, 23 June 2014. Gold prices ended the U.S. day session slightly higher on Monday. But silver slipped. The civil war in Iraq remains a bullish market factor for safe-haven gold.
Gold futures inched higher on Monday, adding slightly to gains after last week's advance of 3.3%. Gold for August delivery added $1.80, or 0.1%, to settle at $1,318.40 an ounce on the Comex division of the New York Mercantile Exchange. July silver pulled back by 3 cents, or 0.2%, to end at $20.92 an ounce.
In overnight world developments, the China HSBC preliminary manufacturing purchasing managers index came in at 50.8 in June versus 49.4 in May. This is the first time the reading has been above 50.0 this year. A reading above 50.0 suggests expansion. This news is a bullish underlying factor for the raw commodity sector, as China is the world's largest importer of raw commodities.
Meantime, the European Union's Markit manufacturing and services PMI came in at 52.8 in June versus 53.5 in May. France was the main weak spot in the report and the reading did not meet market expectations.
U.S. economic data due for released on Monday included the Chicago Fed's national activity index and the U.S. flash manufacturing purchasing managers' index. Neither report had much of an impact on the market place. Existing home sales increased 4.9% in May to a seasonally adjusted annualized rate of 4.89 million from an upwardly revised 4.66 million (from 4.65 million ) in April. The consensus expected existing home sales to increase to 4.80 million.
Mortgage rates, which had been moving higher for most of 2014, fell sharply over the last couple of months and helped boost sales growth, but year-over-year sales are still 5.0% below May 2013 levels. Also, purchases by first-time home buyers accounted for only 27% of all sales in May. That was down from 29% in April. First-time home buyers typically account for a third of home purchases during periods of normal sales trends.
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