Gold Stands above 1,400 Dollars per Ounce on Weak Dollar

CHICAGO, June 3 -- Gold futures on the COMEX division of the New York Mercantile Exchange climbed back above 1, 400 dollars per dollar Monday on a weaker dollar following weak Institute of Supply Management (ISM) index.

 

The most active gold contract for August delivery rose 18.9 dollars, or 1.36 percent, to settle at 1,411.9 dollars per ounce.

 

Dollar fell against other major currencies Monday after ISM index for May fell to 49 from 50.7 in April, marking the first contraction since November and the lowest reading since June 2009. Readings under 50 indicate more manufacturers are shrinking instead of growing.

 

Conflicting data on China's manufacturing industry also supported gold. HSBC China manufacturing Purchasing Managers' Index (PMI) released Monday fell to 49.2 in May from 50.4 in April. The figure contradicts with the manufacturing PMI published by the Chinese Government Saturday, which rose to 50.8 in May from 50.6 in April. Meanwhile, manufacturing PMI in the euro zone climbed to 48.3 from 46.7 in April, marking the highest level in 15 months. But the reading still indicated contraction.

 

Gold fell 5.4 percent in May, and has dropped in seven of the eight months in the past.

 

With global economy recovering, other assets, say equities, have become more attractive to investors for their higher returns than gold, tarnishing gold's safe-haven appeal, market analysts said.

 

Silver for July delivery gained 47.8 cents, or 2.15 percent, to close at 22.721 dollars per ounce. Platinum for July delivery soared 35.6 dollars, or 2.44 percent, to close at 1,497.4 dollars per ounce.