Investing.com - Gold prices gained in Asia on Friday on physical demand and as the CME cut the amount of collateral required to trade the benchmark gold and silver futures contracts overnight.
CME, which owns the Comex division of the New York Mercantile Exchange, trimmed gold margins by 7.7% effective close of trading Friday, in a notice emailed Thursday evening.
Speculative investors in the benchmark 100-troy ounce gold contract can now deposit $6,600 to open a position and maintain $6,000 of that to keep that position overnight. That's down from the previous initial margin of $7,150 and maintenance margin of $6,500.
The initial and maintenance margin requirements for producers or consumers of gold have been reduced to $6,000 from $6,500. Trading margins on the benchmark 5,000-ounce silver futures contract were cut 8.3%.
The initial and maintenance margin requirements for silver producers and consumers have been reduced to $8,250 from $9,000.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at $1,296.50 a troy ounce, up 0.22%, after hitting an overnight session low of $1,291.10 and off a high of $1,307.30.
A mixed bag of data that dampened Wall Street and currency markets failed to convince metals markets that the Federal Reserve will rethink the pace at which it dismantles its monthly bond-buying program.
The Federal Reserve Bank of Philadelphia said its manufacturing index ticked down to 15.4 this month from 16.6 in April, better than expectations for a 14.0 reading.
The data came after the U.S. Department of Labor said the number of individuals filing for initial jobless benefits in the week ending May 10 fell by 24,000 to 297,000 from the previous week’s revised total of 321,000. Analysts had expected jobless claims to fall by 1,000 to 320,000 last week.
Elsewhere, the New York Fed said its manufacturing index climbed to a two-plus-year high of 19.01 in May from a reading of 1.29 in April, far surpassing market calls for a rise to 5.00 this month.
On the other hand, U.S. industrial production dropped 0.6% last month, confounding expectations for a 0.1% rise. March's figure was revised up to a 0.9% increase from a previously estimated 0.7% gain.
U.S consumer inflation rates came in better than expected as well, though concerns arose after investors digested the numbers.
The Bureau of Labor Statistics reported earlier that the U.S. consumer price index rose to 0.3% in April from 0.2% in March, in line with market expectations.
The U.S. core consumer price index, which excludes food and energy items, rose by 0.2% last month, more than the expected 0.1% uptick, after a 0.2% gain in March.
On Thursday, however, the producer price index came in much better than expected, and the consumer inflation rate's inability to maintain the same pace as its wholesale counterpart softened the dollar somewhat by stoking concerns surrounding the strength of U.S. demand for goods and services.
The U.S. producer price index increased by 0.6% last month, beating forecasts for a 0.2% gain, after rising 0.5% in March.
The core producer price index advanced 0.5% last month, compared to expectations for a 0.2% increase, after rising 0.6% in March.
The Federal Reserve views core prices as a better gauge of longer-term inflationary pressure because they exclude the volatile food and energy categories.
Gold prices have remain elevated in the U.S. over the last several years due to Fed stimulus programs, which weaken the dollar to spur recovery, making the precious metal an attractive hedge.
The U.S. central bank is widely seen closing the program this year and hiking benchmark interest rates some time next year.
Silver for July delivery was up 0.09% at $19.502 a troy ounce. Copper futures for July delivery were up 0.09% at $3.147 a pound.