Gold gains on disappointing data

The price of gold rose to its highest close in New York since late June as the US dollar weakened and disappointing data brought out risk-averse buyers who wanted a safe place to put their cash.

December gold added $9.60 to $1,226.20 per troy ounce in New York markets.

Among the disappointing data was the New York Federal Reserve’s Empire State manufacturing index, which was up to 7.1 this month, from 5.1 in July, but factory output in the region did not expand as much as had been expected.

Additionally, the National Association of Homebuilders/Wells Fargo Housing Index dropped to 13, its worst since March 2009, from 14 in the last survey and lower than an expected 15.

Also disappointing was the news that Japan’s gross domestic product was up only 0.4 percent in the second quarter, against an expected rise of 3.2 percent, which came as new data also showed that China’s economy surpassed Japan’s as the world’s second-largest economy, also in the second quarter.

September silver was also higher in New York trade, adding 32 cents to $18.43 per troy ounce.

Among base metals, December copper added 3 cents to $3.30 per pound in New York, while three-month contracts for the metal used in manufacturing and construction added $94 to $7,250 per tonne on the London Metal Exchange after inventories in LME-monitored warehouses fell again.

The gain for copper came after Credit Suisse forecast that copper could sell for as much as $10,000 per tonne within the next two to three years.

Other base metals also saw price gains during the session.