(Reuters) – Gold price reached its lowest since early July losing 2% on Monday as U.S. manufacturing data came better than expected.
The yellow metal price dropped sharply as the strong economic data from the U.S. and slight rise in the US dollar index by 0.2% spurred short-selling and bearish sentiment emerged in the bullion market.
Data from the U.S. showed manufacturing sector expanded last month. The U.S. ISM Mfg Index rose from 56.4 the previous month, October, to 57.3 on November, the strongest rise in 2 and half years. It was expected to rise to 56.7 at most, with more consensus weight towards 55.5.
Gold price in the spot market fell by 2% to be traded at $1,227.25 by 11:36 am EST, and last quoted around $1,225 level . The yellow metal had 3 straight months of losses, with November as the largest loss by 5.4%.
U.S. Comex gold futures for February delivery price dropped by $23.60, last quoted at $1,226.80 per ounce.
Gold price in terms of Euro also fell to its lowest since August 2010 at the price of 904.89 Euros per ounce. This might be considered as another signal of a recovering US dollar and U.S. economy in general, according to Reuters.
Market investors await other data, including non-farm payrolls, manufacturing PMI and U.S. Q3 GDP. These data should provide more insight into the strength of the U.S. economy and hint a timing for scaling back the Fed QE program.