Gold posted only a marginal loss following yesterday’s better than expected US manufacturing data and upbeat updates on Chinese manufacturing and Australia’s GDP growth.
China said its PMI (purchasing managers index) rose from 51.2 to 51.7, signalling a faster rate of the expansion of the country’s manufacturing sector, while Australia’s GDP grew at an annualised rate of 1.2% in Q2, marking the fastest growth in three years.
Shares in the US and Europe took off a little later when the Institute of Supply Management (ISM) reported that its US manufacturing index unexpectedly rose to 56.3 in August.
Gold is seen as one of the main safe haven assets and usually moves inversely to equities. This week, however, the yellow metal has been strong and almost unresponsive to movements in stock markets. Investors are buying more gold, seeking refuge ahead of Friday’s key US jobs data, which will include updates on non-farm payrolls and US unemployment rate.
Weekly initial and continuing jobless claims data is due out today.
Expectations aren’t very high with an increase in the unemployment rate expected along with further reductions in payrolls.
Today, gold inched higher to US$1,246/oz, while silver and platinum rose to US$19.44/oz and US$1,537/oz respectively.
Major mining stocks were in decline. Silver miner Fresnillo (LON:FRES) and platinum miner Lonmin (LON:LMI) slid 1.1%, while African Barrick Gold (LON:ABG) declined 1.8%.
Randgold Resources (LON:RRS) was flat.
Specialty chemicals firm Johnson Matthey (LON:JMAT) did better, advancing 1.8%.
Aquarius Platinum (LON:AQP) led the midcaps with a 3.2% advance. Petropavlovsk (LON:POG) rose marginally and silver producer Hochschild Mining (LON:HOC) slipped 2.7%.
Botswana and South Africa operating diamond mining and exploration company Firestone Diamonds (LON:FDI) was among the top performers in the sector with a 15% surge. Vatukoula Gold Mines (LON:VGM), which produces gold from the Vatukoula mine in Fiji, also did well, posting a 7% gain.
Tajikistan focused mineral exploration and development company Kryso Resources (LON:KYS) added 5%.