Events in the Middle East curtailed investor risk appetite
Gold prices gained ground building on the prior session's moderate advance, while silver moved off of multiyear lows on Tuesday, 23 September 2014 at Comex but well down from the highs scored in overnight trading. Events in the Middle East curtailed investor risk appetite which prompted some safe-haven demand and short covering to be featured in gold. However, the gains in gold were eroded as the session progressed, due in part to the U.S. dollar index sharply paring its solid early losses.
Gold for December delivery rose $4.10, or 0.3%, to settle at $1,222 an ounce.
December silver reversed losses and edged up a penny to $17.71 an ounce.
There was risk aversion back in the market place on Tuesday following reports overnight that U.S. airstrikes hit the ISIS terrorists at several locations in Iraq and Syria. Arab U.S. allies in the region also helped the U.S. cause, reports said. Meantime, there were also reports that Israel shot down a Syrian jet that entered its air space. These developments pressured world stock markets and boosted safe-have gold and U.S. Treasuries.
In other news overnight, the preliminary HSBC China manufacturing purchasing managers index (PMI) rose to 50.5 in September versus the final reading of 50.2 in August. That news was considered by the market place to be better than expected but only modestly supported stock markets in Asia overnight. The China news is a mildly bullish underlying factor for the beaten-down raw commodity sector.
The European Union's Markit composite PMI disappointed Tuesday as it came in at 52.3 in September versus 52.5 in July and was the lowest reading this year. That news helped to sink European stocks. The news supports the notions that EU monetary policy will continue to be eased, while at the same time the U.S. Federal Reserve continues to ratchet in its heretofore very accommodative monetary policy.
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U.S. economic data released Tuesday included the weekly Goldman Sachs and Johnson Redbook retail sales reports, the U.S. monthly house price index, the U.S. flash manufacturing PMI, and the Richmond Fed business survey. None of this data had a big impact on the gold and silver markets.
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