Weak Dollar Underpins Demand For Gold

Weak Dollar Underpins Demand For Gold

Gold and the corresponding SPDR Gold Trust (ETF) (NYSEARCA:GLD) are moving in between losses and gains today after posting solid gains overnight. Gold Futures for August delivery were trading 0.11% higher at $1,218.75 while traders are closely awaiting more data today to find direction.

Gold holds gains

May manufacturing activity is due to be released later today by the U.S. Institute of Supply Management. According to market projections, the data is likely to drop 0.3 points to 50.5. Other data lined up for today include April construction spending, May auto sales, and Fed’s Beige Book. Any substantial improvement in these readings could escalate the early rate hike expectations.

The decline in consumer confidence as reported yesterday kept demand for the yellow metal intact. In absence of optimistic data, the market trimmed rate hike expectations, the probability of which stands at 23% according to a CME Group report. Also, a weakening US Dollar (CURRENCY:USD) underpinned demand for gold, which is perceived as a safe haven asset.

Barrick to pay damages

In miners, a U.S. lawsuit directed Barrick Gold Corporation (NYSE:ABX) to pay $140 million to investors in relation to its mismanagement of Pascua-Lama project in Chile. The company was alleged to have overlooked internal controls and misrepresented environmental compliance while operating the project. Though Barrick continues to maintain that the allegations are unfounded, it agreed to pay $140 million as part of the settlement, which is insured. The company’s operation at the project is currently on hold.

Gold Standard Ventures Corp (NYSEMKT:GSV) updated shareholders that it has resumed drilling at the North Dark Star on its wholly-owned Railroad-Pinion project in Nevada. The drilling is a follow-up operation after the company had made an oxide gold discovery at the project last year. Drilling is a part of Gold Standard’s $13.4 million exploration program that it aims to undertake this year and will include up to 43,000 m of RC and core drilling.