Gold tilts up, aims to extend rise to a third day

Gold futures tilted higher Wednesday,

 aiming to extend their rise to a third straight session, as investors weighed the metal’s safe-haven appeal against a backdrop of better-than-expected U.S. private-sector employment data and a drop in factory orders.

The market also garnered support ahead of Thursday’s decisions on monetary policy by the European Central Bank and Bank of England and Friday’s official U.S. nonfarm payrolls report.

Gold for delivery in April GCJ3 +0.23% traded at $1.578.60 an ounce on the Comex division of the New York Mercantile Exchange, up $3.70, or 0.2%. It stuck to a range between $1,566.40 and $1,584.30.

Prices tallied a modest gain of $2.60 over the past two trading sessions.

May silver SIK3 +0.98%  also rose 29 cents, or 1%, to $28.90 an ounce.

The massive quantitative-easing policies of the U.S. “look to be spreading around the world (think England, Japan), which should typically propel gold prices,” said Jason Rotman, president of Lido Isle Advisors in Newport Beach, Calif.

“However, with strong U.S. economic data recently hitting the wires, including [Wednesday’s] ADP jobs numbers, we also see a move away from safety (gold, bonds) and into risk-based assets such as equities,” he said. 

The Dow Jones Industrial Average DJIA +0.18%  closed at an all-time high on Tuesday. See: U.S. stock rally lifts Dow to record high.

Data from Automatic Data Processing Inc. Wednesday showed that U.S. private-sector jobs rose by 198,000 in February, more than economists expected. See: Private-sector jobs growth beats expectations.

 

Factory orders in January, meanwhile, fell 2%, though economists surveyed by MarketWatch expected orders to decline by 2.2%. See: U.S. factory orders drop 2.0% in January.

The Federal Reserve’s Beige Book, which was set for release at 2 p.m. Eastern — after the Comex session ends — is expected to show the economy limped along in early 2013. 

But for now, the gold market is looking forward to the Bank of England meeting, “and perhaps anticipating more stimulus, which would typically be bullish for gold prices,” said Rotman. 

Stimulus is typically tied to inflation and gold is seen as a hedge against inflation. 

On the downside for gold prices Wednesday, the dollar edged higher against many of its rivals.  The ICE dollar index DXY +0.49% , which measures the greenback against a basket of six currencies, rose to 82.390 from 82.078 in late North American trading on Tuesday. Dollar strength weighs on dollar-denominated commodities such as gold since it makes them more expensive for holders of other currencies.

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