Gold future settle at a more than 2-week high – MarketWatch

Gold futures settled at their highest level in more than two weeks on Tuesday, as a selloff in global stock markets and downbeat economic data helped boost the metal’s investment appeal.

Prices for the metal had posted declines in five of the last six sessions, as investors weighed prospects for a U.S. rate increase and on fears about China’s economic growth linger.

Gold futures for December delivery

GCZ5, -0.05%

 rose $7.30, or 0.6%, to settle at $1,139.80 an ounce on Comex. That was the highest settlement since Aug. 24.

China’s official manufacturing purchasing managers index fell to a three-month low, delivering a fresh blow to global markets that have spent August rattled by uncertainty about China’s economic health. The sharp decline in equities, in turn, lured more investors to the perceived safety of gold.

In the U.S., data showed that the final Markit PMI totaled 53.0 in August, down from 53.8 in July. Also, the Institute for Supply Management said its U.S. manufacturing index fell to 51.1% in August from 52.7% in July.

“On top of safe haven buying, gold is in a nice uptrend and moving into its strongest period of the year for physical demand with India wedding season approaching fast,” said Colin Cieszynski, chief market strategist at CMC Markets.

In August, gold logged its largest monthly gain since January as investors fretted about recent stock-market declines spurred by China worries. It saw a monthly gain of around 3.4%, which was the largest since January’s 8% surge.

But although turmoil in Beijing has been luring haven buyers into gold, the outlook for the metal may not be lustrous.

Read: Gold screams stock correction not over

In a Tuesday research note, Barclays points to a number of bearish factors that could help cap upward moves in the yellow metal. It expects limited physical demand going forward and said the gold market is already factoring in shifting expectations about the timing of a Federal Reserve rate hike to sometime after September.

“We see limited support from physical fundamentals, and further support from U.S. rate expectations should also be limited, as the market is already pricing in a low probability of a September hike,” Barclays said.

On Comex, gold was among the few gainers as concerns surrounding demand put pressure on industrial metals.

December silver

SIZ5, -0.21%

 added 3.4 cents, or 0.2%, to end at $14.62 an ounce. But December copper

HGZ5, -0.39%

 ended at $2.302 a pound, down 3.6 cents, or 1.5%. October platinum

PLV5, -0.41%

 shed $2.10, or 0.2%, to $1,008.40 an ounce, while December palladium

PAZ5, -0.98%

 fell $23.05, or 3.8%, to $579.20 an ounce.