Gold traders watching macro data, seasonal September patterns

After rising 6.35% in August, the U.S. Comex gold futures (COMEX:GCZ13) jumped 1.14% on Sept. 3 to $1,411.70 after the Labor Day weekend. The Dollar Index (NYBOT:DXZ13) also rose 0.33% after rising 0.78% last month. The S&P 500 Index (CME:SPZ13) increased 0.42% on the first day of trading in September after dropping 3.13% in August while the Euro Stoxx 50 Index surged 1.18% this month after falling 1.69% last month. The U.S. 10-year Treasury bond (CBOT:ZBZ13) yield surged from 2.7839% at the end of August to as high as 2.9105% but settled at 2%. percent on Tuesday.

Stronger Manufacturing Growth Globally

The U.S. ISM Manufacturing Index jumped to 55.7 in August, the highest level in 26 months. The U.S. manufacturing growth is led by a jump in construction spending, new orders and exports demand. The ISM increase and the expectation of the Fed's tapering this month have strengthened the U.S. Dollar. The China official PMI Index in August jumped to 51, a three-year high, compared to an expectation of 50.6. The Eurozone August PMI also rose faster than expected due to the growth in Spain and Italy.

Gold Market Zeros in the Middle East Tension and Rising Uncertainties

Despite the strength in the U.S. dollar, the gold has reasserted its role as the safe haven as the uncertainty in the Middle East influences sentiments this month. The gold futures reacted positively to the news that the U.S. house speaker John Boehner supported President Obama's call for the Congress to approve a war on Syria. The rising market uncertainties are likely to lead to a rise in the "fear index" in September. At the same time, a chart from the seasonal shows that September is a "golden month" for gold, with the gold price falling in only five Septembers over the last 25 years.

This week's U.S. payroll numbers and the unemployment rate will give more hints to the Fed's likely actions in the FOMC meeting this month. Policy meetings, macro data, geopolitical news, and seasonal gold pattern will dominate gold trading in September.

About the Author
Austin Kiddle

Austin Kiddle is a director of the London-based gold broker Sharps Pixley Ltd.

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