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What Gave Gold Its Glow on Tuesday, September 6?

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Gold and silver inched higher

After posting moderate gains on Monday, September 5, gold inched higher to one-month-high price levels on Tuesday, September 6. At 1:50 PM EDT on Tuesday, the COMEX gold futures contract for December delivery was trading at $1,355.15 per ounce, a gain of ~2.1%.

The COMEX silver futures contract for December delivery was trading at $20.18 per ounce, a gain of ~4.2%.

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ISM services PMI saw the slowest growth in six years

The US ISM services PMI grew in August at its slowest pace in more than six years. According to the data released by the Institute of Supply Management, the US ISM non-manufacturing PMI data for August came in at 51.4. This is lower than July’s value of 55.5 and the forecast of 55.0, disappointing the market.

This weaker-than-expected data weighed on the US dollar on Tuesday, September 6. The weaker dollar supports the price of dollar-denominated commodities like gold, silver, and copper.

Gold and silver started the day on a stable note and inched higher as the day progressed. Please read Copper, Gold, and Silver Are Stable Early on September 6 to see how metals traded in the early morning.

The weaker-than-expected US non-farm payroll data released on Friday, September 2, subdued the expectations of an interest rate hike in the near term. In addition, the weaker US ISM non-manufacturing data further decreased the odds of a near-term interest rate hike. On Tuesday, September 6, the chances of an interest rate hike in September, November, and December stood at 15%, 20.3%, and 50.7%, respectively.

At 2:05 PM EDT on Tuesday, September 6, precious metal producers Barrick Gold (ABX), Newmont Mining (NEM), Silver Wheaton (SLW), and Royal Gold (RGLD) rose by ~4.3%, ~2.9%, ~4.5%, and ~4.4%, respectively. The SPDR Gold Trust ETF (GLD) rose by 1.8%.

The final article in this series explains the performance of companies in the energy, metals, and mining sectors on Tuesday, September 6.

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