Gold rises as poor manufacturing data makes QE seem more likely

The price of various gold contracts increased on July 3, as the poor global manufacturing data boosted the hopes of precious metals buyers that the central banks will engage in further measures to boost the money supply and stimulate the economy.

Spot gold was trading 0.7 percent higher at $1,608.39 per ounce by 09:59 GMT, according to Reuters. August gold was up 0.7 percent at $1,609.40 an ounce on the Comex division of the New York Mercantile Exchange.

Bloomberg reported that August Comex gold was trading at $1,615 an ounce, Bloomberg reports. The contract was valued at $1,612 per ounce by 7:59 a.m. Bullion for immediate delivery was up 0.9 percent at $1,611.77 in London.

The European Central Bank could be the first of these institutions to engage in further stimulus, with many market experts predicting that its lending rates will decline to record lows during the week starting July 9, according to Reuters.

"Over the last few weeks U.S. numbers have worsened a lot and this has brought about the probability of QE3 – which is probably the most important reason for the market to believe in gold," Commerzbank analyst Eugen Weinberg told the news source.