Gold futures settled higher on Wednesday, finding support after posting losses over the past two trading sessions.
Platinum prices, meanwhile, continued to trade at their lowest levels in more than six years as the Volkswagen scandal raised worries about demand for the metal in car parts.
December gold GCZ5, -0.13% gained $6.70, or 0.6%, to settle at $1,131.50 an ounce on Comex, while December silver SIZ5, -0.09% tacked on 3.3 cents, or 0.2%, to $14.789 an ounce. On Tuesday, gold settled 0.7% lower, with traders focused on expectations that the Federal Reserve will raise interest rates this year.
“The correction of the last couple of days has run its course, and gold is resuming the upswing that started back in July,” said Colin Cieszynski, chief market strategist at CMC Markets.
“The Fed has delayed interest rate liftoff and even when they do start raising rates…the pace of increases will be a lot slower than the 10-plus straight increases we had [in the] last cycle,” he said.
Meanwhile, “the soft China news keeps some central banks on their heels, but this could be offset by the less dovish-than-expected” comments from the European Central Bank’s President Mario Draghi, he said.
The preliminary Caixin China Manufacturing Purchasing Managers’ Index, a gauge of nationwide manufacturing activity, fell to a six-and-a-half year low of 47.0 in September.
Data also released Wednesday show that the preliminary U.S. Markit manufacturing index was unchanged at 53.0 last month.
“Traders and pundits are still focused on the Fed’s will-they-won’t-they quarter point hike, but [Wednesday’s] bad Chinese data fit exactly” with Fed Chairwoman Janet Yellen’s key excuse for delaying a rate hike last week, said Adrian Ash, head of research at BullionVault.
Looking ahead, “the lack of global inflation means that the focus remains firmly on the outlook for U.S. monetary policy and therefore Federal Reserve remarks and macroeconomic data,” said Fawad Razaqzada, technical analyst at Forex.com.
Riskier assets like U.S. stocks have lost ground this week, with the S&P 500 SPX, -0.20% down 0.8% as of Tuesday’s close, leading some analysts to predict that gold should score gains on haven demand.
“With other markets looking more stressed, gold may well start to shine again,” said William Adams, head of research at FastMarkets.
Among other metals traded on Comex, December copper HGZ5, +0.00% added 1.1 cents, or 0.5%, to $2.308 a pound.
October platinum PLV5, +0.28% lost $5.10, or 0.5%, to $932.40 an ounce, extending losses in the wake of Tuesday’s 3.7% drop.
“Platinum’s tie-in to diesel engines will not be doing it any favours,” following the Volkswagen scandal, said Adams, in a note Wednesday.
But palladium, which isn’t used as much in diesel cars, saw its December contract PAZ5, +2.00% jump $34.75, or 5.7%, to $645.70 an ounce after a 0.8% loss a day earlier.