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The markets were digesting the latest batch of macroeconomic data releases on Thursday, which included a worse than expected manufacturing figure for China, where activity fell to its lowest in nine months in July among privately-held companies. Signs of economic trouble tend to support safe havens like gold. US ISM manufacturing PMI figures were also released on Thursday showing weaker than expected activity in July, further contributing to interest in low-risk assets.<\/p>\n\n\n\n
Meanwhile, the Bank of England cut interest rates on Thursday from 5.25% to 5% — the first cut in more than four years. This follows recent cuts by other central banks including the ECB, the Swiss National Bank and Bank of Canada, with expectations that the US Fed will begin slashing rates in September. Lower interest rates are broadly supportive for gold and silver prices, as assets which don\u2019t generate a yield.<\/p>\n\n\n\n
Gold prices rallied on Wednesday in a move that was partly linked to heightened geopolitical risks, following the assassination of Ismail Haniyeh, the leader of Palestinian militant group Hamas. The killing prompted Iran to threaten \u201charsh punishment\u201d for Israel. Gold prices tend to rise when risks of conflict increase, as investors move money away from higher-risk assets.<\/p>\n\n\n\n
However, gold\u2019s upside may have been limited by strength in the US dollar, which has made gains against other major currencies in recent days. Looking ahead, the markets will be watching out for the US non-farm payrolls figures for July on Friday, as well as the monthly unemployment rate, for the latest snapshot on the US economy.<\/p>\n\n\n\t\t\t