Gold Ends Sharply Higher On Syria, Upbeat Data

(RTTNews) - Gold futures snapped a three-day loss to surge well past the $1,400-mark Tuesday, regaining its safe haven appeal on continued tension over military action against Syria with President Barack Obama pushing hard for a quick Congressional approval. The precious metal also found support after concerns surfaced over strikes looming ahead at South African gold mines and on some upbeat manufacturing activity data out of China.

President Obama said he was confident the Congress would approve his military action against Syria at a White House meeting. Earlier, news of two missiles test fired by Israel into the Mediterranean had investors scurrying toward the precious metal.

Yesterday, Goldman Sachs upped its second-half 2013 gold price forecast to $1,388 an ounce from its previous forecast of $1,300 an ounce, indicating investors positioning for an increase in inflation rates amid speculation of a potential military strike on Syria.

China's manufacturing sector performance strengthened in August, suggesting the overall economic growth may gather pace in the coming months in the world's second largest economy, according to two separate surveys.

Gold for December delivery, the most actively traded contract, jumped $15.90 or 1.1 percent to close at $1,412.00 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,412.90 and a low of $1,373.60 an ounce.

Last week, gold settled lower on profit taking after surging to a fresh three month high on its safe haven appeal following escalating tensions in Syria with talks of military intervention by the U.S. and its allies.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 921.03 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.32 on Tuesday, up from 82.28 at its previous close in North American trade. The dollar scaled a high of 82.52 intraday and a low of 82.23.

The euro traded lower against the dollar at $1.3173 on Tuesday, as compared to its previous close of $1.3193 in North America. The euro scaled a high of $1.3197 intraday and a low of $1.3140.

In economic news from the U.S., the Institute for Supply Management said its purchasing managers index edged up to 55.7 in August from 55.4 in July, with a reading above 50 indicating an increase in manufacturing activity. The modest increase by the index came as a surprise to economists, who had expected the index to dip to a reading of 53.8. With the unexpected increase, the index added to the 4.5-point.

Separately, the US Commerce Department said construction spending rose 0.6 percent to a seasonally adjusted annual rate of $900.8 billion in July from the revised June estimate of $895.7 billion. Economists had been expecting spending to increase by about 0.3 percent.

China's purchasing managers' index, a gauge of factory activity, increased to a 16-month high of 51 in August from 50.3 in July, the China Federation of Logistics and Purchasing (CFLP) and the National Bureau of Statistics said Sunday. Meanwhile, a survey by HSBC and Markit Economics the final PMI reading was 50.1 in August, up from a 11-month low of 47.7 in July. This ended a three-month period of deterioration, with the index score in line with the flash reading.

Industrial producer prices in the euro area increased for a second consecutive month in July, data published by Eurostat revealed. The producer price index of the industrial sector, excluding construction, rose 0.2 percent year-on-year in July following a 0.3 percent increase in June. Economists had forecast a 0.1 percent rise.