Gold prices rose sharply on Tuesday, rebounding from near five-month lows hit in the previous session, as the dollar's steep slide boosted the demand for the safe-haven asset.
Data showing a decline in U.S. manufacturing activity in the month of November, and hopes that there will be a compromise in the U.S. Senate over a coronavirus relief proposal also contributed to gold's rise.
The dollar index, which fell to 91.27 a little before noon, stayed around the same level as the session progressed.
Gold futures for February ended higher by $38.00 or about 2.1% at $1,818.90 an ounce, recording the biggest single-session gain in almost four weeks.
Silver futures for March ended stronger by $1.497 or 6.6% at $24.090 an ounce, while Copper futures for March settled at $3.4850 per pound, gaining $0.0470 for the session.
According to a report released by the Institute for Supply Management, manufacturing activity in the U.S. continued to expand in the month of November, although the pace of growth slowed by more than expected.
The ISM said its manufacturing PMI dropped to 57.5 in November from 59.3 in October, with a reading above 50 indicating growth in the manufacturing sector. Economists had expected the index to dip to 58.0.
The bigger than expected decrease by the headline index came as the new orders index slid to 65.1 in November from 67.9 in October and the production index fell to 60.8 from 63.0.
The employment index also tumbled to 48.4 in November from 53.2 in October, indicating a contraction in employment in the manufacturing sector following one month of growth.
On the inflation front, the report said the prices index edged down to 65.4 in November from 65.5 in October but still pointed to the sixth consecutive month of growth in raw materials.
A report released by the Commerce Department showed construction spending in the U.S. jumped by 1.3% to an annual rate of $1.439 trillion in October after falling by 0.5% to a revised rate of $1.420 trillion in September.
Economists had expected construction spending to climb by 0.8% compared to the 0.3% uptick originally reported for the previous month.
In testimony before the Senate Banking Committee, Federal Reserve Chair Jerome Powell called the economic outlook "extraordinarily uncertain" and noted it will depend, in large part, on the success of efforts to keep the coronavirus in check.
The material has been provided by InstaForex Company - www.instaforex.com
source http://www.mt5.com/forex_news/quickview/2168125/
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