by Vivian Teo
The gold price rose during Asian trading hours on Monday with support seen ahead of the US Federal Open Market Committee’s (FOMC) meeting on March 15-16.
Spot gold was last at $1,253.10-1,253.40 per ounce, up $2.80 from Friday’s close. Trading ranged at $1,252.20-1,256.80 so far.
The spot gold price had hit a 13-month high of $1,282.90 during Asian trading session on Friday, but eased thereafter during US trading hours after US equities surged.
Support around $1,235 should keep the metal buoyant leading into the FOMC announcement, while $1,275-1,280 will likely cap any moves higher, said MKS Group on Monday morning.
FOMC chairwoman Janet Yellen and her fellow central bankers are not expected to raise rates anytime soon, but tone and language related to the latest ECB decision will be closely scrutinized.
“Our concern is that gold may struggle in the short term while risk-on is seen elsewhere – emerging market currencies and equities are trending higher. Still, it is possible that, with commodity markets rising, there is more investor interest in buying into commodity baskets again, especially with oil prices climbing too,” said William Adams, head of research at FastMarkets.
On Friday and Saturday, China released a string of economic data which were mostly softer-than-expected.
Chinese industrial production grew 5.4 percent year-on-year in February, which was below consensus of 5.6 percent and January’s 5.9 percent growth, according to data released by the country’s National Bureau of Statistics on Saturday.
China’s February retail sales growth at 10.2 percent year-on-year was below forecast of 10.9 percent and January’s 11.1 percent.
But Chinese fixed asset investment growth was better- than-expected at 10.2 percent year-on-year in January-February, relative to consensus of 9.5 percent and January’s ten percent.
The latest data follows disappointing Chinese money supply, new loans and foreign direct investment numbers released late last Friday.
Chinese M2 money supply had undershot at 13.3 percent year-on-year in February, relative to a forecast of 13.8 percent and January’s 14 percent.
New loans in February were at 727 billion yuan, compared to market expectations of 1.2 trillion yuan and 2.51 trillion yuan in January.
The country’s foreign direct investment also slowed to 2.7 percent year-on-year in January-February, compared to January’s reading of 3.2 percent.
But analysts said seasonal factors had a part to play in the soft data.
“We would not read too much into the weaker-than-consensus retail sales, industrial production and fixed asset investment data. Seasonal factors are in play,” said Credit Suisse on Monday morning.
“The key takeaways though are that auto sales could be weakening, infrastructure sector spending is picking up, real estate investment and sales in tier one and two cities remain buoyant, and consumer staples remain resilient,” the bank said.
In equities, the Shanghai Composite is so far up 2.79 percent to 2,888.633 on Monday.
In currencies, the US dollar index fell 0.05 percent to 96.19 on Monday.
In other commodities, the Brent crude spot price rose 0.3 percent to $40.41 per barrel, and the Texas light sweet crude spot price decreased 0.23 percent to $38.36 so far on Monday.
In other precious metals, silver rose $0.072 to $15.505/15.55 recently. Platinum was $5 higher at $964/969, and palladium increased $3 to $571/576 so far on Monday.
On the Shanghai Futures Exchange, gold for June delivery was unchanged at 263.20 yuan per gram, while June silver was flat at 3,431 yuan per kilogram.
(Additional reporting by Dalton Barker)
