News Column

Gold Ends Higher On Safe Haven Appeal

June 10, 2014



WASHINGTON (Alliance News) - Gold futures ended higher for a second straight session on Tuesday, as investors sought the safe haven status of the precious metal after China's inflation accelerated to a five-month high and US equity markets dropping with all major averages slipping into negative territory.

Nonetheless, investors continued to tread cautiously amid a mixed batch of recent global economic data, while awaiting further reports later in the week.

In economic news, Chinese inflation accelerated more than expected to a level last seen in January on higher food prices, while producer prices declined at a slower pace for the second month in May. Meanwhile, wholesale inventories in the US increased much more than expected in April, partly due to some continued growth in inventories of non-durable goods.

Gold for August delivery, the most actively traded contract, gained USD6.20 or 0.5% to close at USD1,260.10 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for June delivery scaled an intraday high of USD1,263.80 and a low of USD1,250.10 an ounce.

Gold ended slightly higher on Monday with little economic data released for direction even as investors continued to opt for the riskier equity assets tracking rising global markets.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 787.08 tons on Tuesday, from its previous close.

The dollar index, which tracks the US unit against six major currencies, traded at 80.85 on Tuesday, up from its previous close of 80.62 late Monday in North American trade. The dollar scaled a high of 80.85 intraday and a low of 80.55.

The euro traded lower against the dollar at USD1.3542 on Tuesday, as compared to its previous close of USD1.3594 late Monday in North American trade. The euro scaled a high of USD1.3601 intraday and a low of USD1.3534.

On the economic front, Chinese inflation rose to a 5-month high of 2.5% in May, but still below the government's target of 3.5%. Inflation was pushed up largely by rising food inflation with food prices rising 4.1%, while non-food prices gained only 1.7% in May.

In economic news from the US, a report from the Labor Department showed wholesale inventories to have increased by a more than expected 1.1% in April, matching the increase seen in the previous month. Economists expected inventories to increase by about 0.5%.

Additionally, the Commerce Department said wholesale sales increased by 1.3% in April after jumping by 1.6% in March.

In Europe, UK industrial production expanded notably in April, a sign the sector has started the second quarter on a strong footing. Industrial output gained 0.4% in April from March, when it grew by a revised 0.1%, the Office for National Statistics said Tuesday. This was the third consecutive rise and matched economists' expectations.



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Source: Alliance News


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