Gold futures advanced for a second session after a report showed manufacturing in the New York area contracted more than expected, bolstering prospects for expanded U.S. monetary stimulus from the Federal Reserve.
The Fed Bank of New York’s general economic index dropped to minus 8.1, wider than the minus 1 median forecast in a Bloomberg survey of economists. The central bank pledged last week to buy $45 billion a month of Treasury securities starting in January, expanding its asset-purchase program, and linked the outlook for its main interest rate to unemployment and inflation.
“We’re seeing a knee-jerk reaction to the factory data,” Matt Zeman, a strategist at Kingsview Financial in Chicago, said in a telephone interview. “The thinking is that this lays the groundwork for even more Fed action.”
Gold futures for February delivery gained 0.1 percent to settle at $1,698.20 an ounce at 1:42 p.m. on the Comex in New York. Prices are up 8.4 percent this year.
Silver futures for March delivery slipped 0.1 percent to $32.28 an ounce on the Comex. Earlier, the metal touched $32.08, the lowest since Nov. 16.
On the New York Mercantile Exchange, platinum futures for January delivery lost 0.4 percent to $1,608.50 an ounce.
Palladium futures for March delivery decreased 0.5 percent to $698.30 an ounce.