Gold futures close lower for a second straight session
Bullion metals ended lower on Thursday, 20 February 2014. Gold futures close lower for a second session on Thursday, undercut by strength in the U.S. dollar as well as Chinese data showing a slowdown in manufacturing activity. More mild profit taking from the shorter-term traders also weighed on prices.
April gold futures fell $3.50, or 0.3%, to settle at $1,316.90 an ounce on the Comex division of the New York Mercantile Exchange.
March silver closed down nearly 17 cents, or 0.8%, to $21.68 an ounce a day after ending an 11 session winning streak.
There was a heavy slate of U.S. economic data released Thursday, including the weekly jobless claims report, real earnings, the consumer price index, leading economic indicators, the flash manufacturing PMI, the Philadelphia Fed business outlook survey, and the weekly DOE energy stocks report. The data was a mixed bag for the commodity marketsshowing both stronger-than-expected readings and weaker-than-expected readingsand all-in-all the markets were little impacted.
There was a downbeat manufacturing purchasing managers' index coming out of China Thursday, which was also a negative for the raw commodity sector. The Markit preliminary manufacturing PMI came in at a seven-month low of 48.3 in February from 49.5 in January. A reading below 50.0 suggests contraction in the sector. This report adds to recent concerns about a slowing Chinese economythe second-largest in the world and the world's largest raw commodity consumer. Meantime, the European Union manufacturing and services PMI came in at 52.7 in February versus 52.9 in January.
Traders and investors are still buzzing about Wednesday afternoon's FOMC minutes, in which the Federal Reserve's voting members held the line on wanting to keep the Fed's tapering process in placedespite some recent weaker-than-expected U.S. economic data. The FOMC minutes were deemed just a bit more hawkish than expected.
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Regarding the data at Wall Street, the weekly initial claims level fell to 336,000 from an unrevised 339,000 while the consensus expected the reading to fall to 335,000. The Conference Board's Index of Leading Indicators increased 0.3% in January after a downward revision to unchanged (from +0.1%) in December. The consensus expected the index to increase 0.4%. The increase in the index was largely the result of the initial claims level returning to normal levels following unusual seasonal biases in the data.
Separately, manufacturing activity in the Philadelphia region contracted for the first time since May 2013. The Philadelphia Fed's Business Outlook Survey for February dropped to -6.3 from 9.4 while the consensus expected the Index to decline to 7.4. Manufacturers commented to the Philly Fed that severe winter storms affected the region and reduced business activity.
Also, consumer prices increased 0.1% in January, down from a 0.2% increase in December. The consensus expected the CPI to increase 0.2%. Inflation growth remains tame, and there was nothing in the data that suggests any type of breakout. Food prices rose 0.1% after being unchanged in December. Excluding food and energy, core CPI increased an in-line 0.1% for a second consecutive month.
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