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Gold Lifts on Soft Economic Data

Simon Constable

Gold prices jumped Thursday following the release of more news of poor economic conditions in the manufacturing sector.

Benchmark bullion futures were up $15.50 at $882 an ounce in recent action on the Comex division of the New York Mercantile Exchange. Gold prices tend to rise on increased economic uncertainty.

The two exchange-traded funds that hold bars of solid gold, streetTracks Gold Shares (GLD Quote - Cramer on GLD - Stock Picks) and iShares Comex Gold Trust (IAU Quote - Cramer on IAU - Stock Picks), were both up 1.9%.

The Federal Reserve says industrial production dropped 0.7% and capacity utilization fell below 80% in April, meaning that the part of the economy involved in making things shrank and operated more than 20% under its full potential.

"The current annual growth rate of production and the level of jobless claims suggest ongoing softness, [but] not a 'collapse' in activity," writes Michael Darda, Chief Economist at MKM Partners in Greenwich, Conn., in a recent research report.

Turning to the precious metals patch, shares of Goldcorp (GG Quote - Cramer on GG - Stock Picks) and those of Yamana Gold (AUY Quote - Cramer on AUY - Stock Picks) were both climbing about 3.6%.

In the currency markets, one euro was buying $1.5436 vs. $1.5457 on Wednesday. One U.S. dollar was buying 104.9 Japanese yen, down from 105.3 yen previously. The British pound was selling for $1.9448, vs. $1.9435 previously.

The CurrencyShares Euro Trust (FXE Quote - Cramer on FXE - Stock Picks) was down 0.1%, and the CurrencyShares Japanese Yen Trust (FXY Quote - Cramer on FXY - Stock Picks) was up 0.2%. The CurrencyShares British Pound Sterling (FXB Quote - Cramer on FXB - Stock Picks) was essentially unchanged.