Gold, Silver Advance on Manufacturing Data

Gold and silver were moving higher in the first morning of February trading, as improved readings of China, EU and U.S. manufacturing — along with an expected deal between Greece and private-sector bondholders — buoyed risk appetite.

Spot gold was 0.5% higher, bid at $1,745.30 per ounce with an ask price of $1,746.30. Spot gold traded as high as $1,750.60 and as low as $1,738.80. The London afternoon reference price fix came in at $1,740, $4 per ounce lower than Tuesday’s reference price, according to Kitco market data.

Spot silver was showing a gain of nearly 2% per ounce, bid at $33.78 with an ask price of $33.88. The morning high as of time of writing was $34.13 and the low was $33.47. Tuesday’s reference price was set at $33.80 in the London a.m., 20 cents per ounce above Tuesday’s reference price.

U.S. manufacturing increased for the 30th consecutive month, according to the January 2012 Manufacturing ISM Report on Business, while the overall economy grew for the 32nd straight month. PMI was at 54.1%, up 1 percentage point from December, and new orders were at 57.6%, up 2.8 percentage points. The ISM report followed improved reading on overall EU and China manufacturing.

The ADP January 2012 employment report was less encouraging, however. U.S. private nonfarm private business payrolls did increase 170,000 from December on a seasonally adjusted basis, though economists expected a 185,000-job gain. The gain from November to December was revised down to 292,000 from 325,000.

Gold bullion prices still were heading higher Wednesday morning in London, rising to $1,750 per ounce and adding to a January gain that was the largest this century, according to BullionVault’s London Gold Market report.

“Buyers have returned to the Euro, which is helping the situation in gold,” said Ole Hansen, a Saxo Bank senior manager. “(Gold) had a bit of lackluster profit-taking yesterday but didn’t break anything important on the downside, which helped confirm that being long is back in vogue.”

Turning to exchange trading, gold trusts were moving higher, while the iShares Silver Trust (NYSE:SLV) was showing sharp gains.

• The SPDR Gold Trust (NYSE:GLD) was moving higher, up around 0.4%.
• The iShares Gold Trust (NYSE:IAU) also was up around 0.4%.
• The iShares Silver Trust was moving sharply higher, up more than 2%.

Gold mining ETFs were showing healthy gains, while the Global X Silver Miners ETF (NYSE:SIL) was up sharply.

• The Market Vectors Gold Miners ETF (NYSE:GDX) was down around 0.45%.
• The Market Vectors Junior Gold Miners ETF (NYSE:GDXJ) was showing gains of 0.9%.
• The Global X Silver Miners ETF was up more than 1.6%.

Gold mining shares were were mixed.

• Agnico-Eagle Mines (NYSE:AEM) was showing losses of some 0.13%.
• Barrick Gold (NYSE:ABX) was up around 0.2%.
• Eldorado Gold (NYSE:EGO) was up around 0.3%.
• Goldcorp (NYSE:GG) was down nearly 0.4%.
• Kinross Gold Corp. USA (NYSE:KGC) was showing gains of around 0.8%.
• Newmont Mining (NYSE:NEM) was up more than 0.7%.
• NovaGold Resources (AMEX:NG) was showing losses of some 0.5%.
• Yamana Gold (NYSE:AUY) was up nearly 0.65%.

Silver mining shares were showing strong gains.

• Coeur d’Alene Mines (NYSE:CDE) was moving higher, up more than 2.4%.
• Hecla Mining (NYSE:HL) was up around 1.7%.
• Pan American Silver (NASDAQ:PAAS) was showing gains of more than 1.6%.
• Silver Wheaton (NYSE:SLW) was showing gains of around 1%.
• Silver Standard Resources (NASDAQ:SSRI) was showing gains of some 2.3%.

As of this writing, Andrew Burger did not hold a position in any of the aforementioned securities. Adrian Ash of BullionVault contributed to this report.