February 3, 2014 / 11:18 AM / 4 years ago

PRECIOUS-Gold rises 1.1 pct after weak U.S., China data; S&P dives

* S&P 500 tumbles over 2 percent after U.S. ISM report
    * China's manufacturing growth slows
    * Investors await January U.S. payrolls data on Friday
    * Coming up: U.S. durable goods, factory orders Tuesday

 (Updates to close of U.S. markets)
    By Frank Tang and Clara Denina 
    NEW YORK/LONDON, Feb 3 (Reuters) - Gold rose more than 1
percent on Monday after disappointing manufacturing data from
the United States and China pummelled Wall Street, while jitters
about emerging markets bolstered an investor flight to safety.
    The Institute for Supply Management data showed growth in
U.S. manufacturing slowed sharply in January on the back of the
biggest drop in new orders in 33 years, while growth in China's
manufacturing sector slowed to a six-month low. 
    Bullion had gained for most of January until last week's
2-percent pullback, underpinned by weakness in global equities
on concerns over plunging assets in emerging economies.
    "In view of the significant currency depreciations in the
emerging economies, gold is likely to remain in relatively high
demand," said Eugen Weinberg, head of commodities research at
Commerzbank.
    Spot gold was up 1.1 percent at $1,256.71 an ounce at
3:24 p.m. EST (2024 GMT), after having jumped to a high of
$1,266.10.
    U.S. gold futures for February delivery settled
up$20.10 at $1,259.90 an ounce.
    In the five minutes after the release of ISM data at 10 a.m.
(1500 GMT), about 15,000 lots, or one-fifth of trading volume at
the time, changed hands. 
    Total turnover was 130,000 contracts, around 30 percent
below its 30-day average, preliminary Reuters data showed.
    Caution over emerging markets, the U.S. economy and the
Federal Reserve's move to taper its stimulus program remain
crucial to the metal's moves in the short term, analysts said.
    "There is a bit of deterioration in risk appetite, which has
given support to gold," ABN Amro's Georgette Boele said. 
    "But in the long run, a stronger dollar and better U.S.
economy should drag gold prices lower and the strength we are
seeing at the moment should still be regarded as a selling
opportunity," Boele said.
    The S&P 500 equities index tumbled 2.4 percent, while
the U.S. dollar fell 0.4 percent against a basket of major
currencies.  
    Focus will now turn to Friday's U.S. nonfarm payrolls
report.
    Markets in China, the world's biggest buyer of bullion, are
closed until Friday, while Hong Kong, a major trading hub, was
shut on Monday for the Chinese New Year holiday.
    Among other precious metals, silver rose 1 percent to
$19.30 an ounce, while palladium eased 0.3 percent to
$698.75 an ounce.
    Platinum was up 0.3 percent at $1,379 an ounce, with
wage talks between South Africa's AMCU union and the top three
platinum producers set to continue this week.
    Platinum group investors also digested news that four of the
top five U.S. auto sellers blamed extreme winter weather for
disappointing sales in January, as analysts and executives
predicted a rebound in February and March. 
 3:24 PM EST     LAST/    NET   PCT      LOW    HIGH  CURRENT
                SETTLE   CHNG  CHNG                       VOL
 US Gold APR   1259.90  20.10   1.6  1240.40 1266.10  119,823
 US Silver MAR  19.409  0.289   1.5   19.060  19.620   34,057
 US Plat APR   1386.60  10.90   0.8  1374.60 1398.40    8,485
 US Pall MAR    702.70  -0.50  -0.1   700.40  713.15    4,907
                                                               
 Gold          1256.71  13.52   1.1  1241.00 1266.10         
 Silver         19.300  0.200   1.0   19.100  19.610
 Platinum      1379.00   4.25   0.3  1377.75 1394.25
 Palladium      698.75  -2.25  -0.3   703.75  711.75
                                                               
 TOTAL MARKET              VOLUME          30-D ATM VOLATILITY
                CURRENT   30D AVG  250D AVG   CURRENT     CHG
 US Gold        127,830   172,213   186,052     18.69    0.23
 US Silver       38,463    43,600    56,067     26.53    0.36
 US Platinum      8,601    10,646    13,326     17.78   -0.15
 US Palladium     5,278     4,042     5,542     19.08    0.56
                                                               
  

 (Additional reporting by A. Ananthalakshmi in Singapore;
Editing by William Hardy, David Goodman, Peter Galloway and
James Dalgleish)

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