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Gold Closed Up 0.8% To A New Six-month High
- Jan 04, 2019 -

Gold futures closed higher on Thursday, the second consecutive trading day with the highest closing price in more than six months, as the US stock market and the dollar both fell, according to MarketWatch.

Gold futures for February delivery on the New York Mercantile Exchange rose $10.70, or 0.8%, to $1294.80 an ounce, after closing 0.2% higher on the previous day. According to FactSet, a financial information provider, this means that gold futures have again hit their highest closing price since mid-June.

Analysts at Zaner Precious Metals, a precious metals investment company, wrote in a research report: "It is clear that the worrying news of Apple's declining sales in China has led to further selling of the stock market, prompting investors to buy gold as a hedge."

Tim COok, Apple's chief executive, released an investor letter after Wednesday's session in the U.S. stock market, in which he lowered the company's revenue outlook for the first quarter to $84 billion, compared with an earlier forecast of $89 billion to $93 billion. In addition, the company lowered its gross margin forecast for the first quarter to about 38%, compared with the previous forecast of 38% to 38.5%. The technology giant said there were many factors contributing to the company's downgrade of its performance guidance, including the slowdown in the economy and disappointing revenue from the iPhone business.

As a result, U.S. stock markets fell sharply on Thursday, and the Nasdaq Composite Index, which has a large share of technology stocks, suffered a setback. The Dow Jones Industrial Average and the S&P 500 also fell sharply as the gold futures market closed on Thursday.

In addition, the fall in the dollar on Thursday also underpinned gold prices, with the Intercontinental Exchange (ICE) dollar index, which tracks changes in the dollar's exchange rate against six major international currencies, falling 0.6% to 96.26. Usually, a fall in the dollar would push up the price of dollar-denominated commodity futures such as gold and crude oil, because investors holding other currencies would have lower costs of buying these commodities.

Meanwhile, the price of futures silver for March delivery rose 14.8 cents to $15.797 an ounce, up 1%, a drop in the session. In Wednesday's trading, the contract also closed up 0.7%.

In terms of economic data, ADP also released a report earlier Thursday showing that private sector employment in the United States increased by 271,000 in December, compared with 179,000 in the previous month. But at the same time, other important economic data did not perform well. The ISM manufacturing index in December was 54.1, down from 59.3% in the previous month, and failed to meet the economists'previous average expectation of 57%, deepening pessimistic market sentiment and prompting investors to buy gold in search of hedge, according to a report released by the American Supply Management Association (ISM).

On Friday, the U.S. Department of Labor will publish a market-focused non-farm employment report. Economists expect that the number of new non-farm jobs will be 184,000 in December last year, while the unemployment rate will fall to 3.6%.

Among other metals traded on the New York Mercantile Exchange, copper futures for March delivery fell 2.1% to close at $2.568 a pound. Platinum futures for April delivery fell 0.6% to $799.30 an ounce. Palladium futures for March delivery rose 0.2% to $1,200.30 an ounce, the highest closing price since December 19 last year.

SPDR Gold Trust, the world's largest gold exchange fund, rose 0.7% in related exchange-traded funds (ETFs), and Van Eck Vectors Gold Miners ETF, an exchange-traded fund that tracks gold mining companies, rose 1.3%.