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Tuesday, January 22nd, 2019 - Buy Gold - Bringing you trusted gold news and gold investing information since 2006

Weak US Data Confirm Gold As Safety Asset

Late Wednesday trade showed gold holding on to healthy gains with investors seeking it as safety following the release of US May manufacturing data and private sector job reports showing weaker figures.

The manufacturing data, published by the Institute for Supply Management, followed an earlier report that showed that the US private sector only added 38,000 jobs in the month of May – causing some to doubt the well-being of the world’s largest economy and causing an undermining of the greenback.

Non-farm payroll data is due to be released on Friday, which will provide another indicator of the capacity of the country to generate jobs. May saw US factory activity slowing down to its lowest level since September 2009.

Although gold vacillated in early business, it embarked on a swift rally as soon as the data was released.

“I think we’re still with the safe-haven play on gold. Gold is the only thing that’s still up today. People are a bit afraid of the weak economy and what happened to the dollar,” David Lee, a precious metals trader at Heraeus Precious Metals Management in New York, said.

The discouraging figures in the US are similar to those released for Europe and China.

“With what’s been going on in the world, I feel gold’s been underperforming,” said Jonathan Jossen on the COMEX exchange floor in New York.

At 3:55 pm EDT (19:55 GMT) spot gold was trading at $1,538.40 an ounce, after hitting $1,550.14 earlier during the day – the highest level it has reached since May 2.

In May, the price of gold fell by some two percent, although it has maintained a near eight percent gain in 2011 as a result of the euro zone debt crisis.

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