News Column

Gold Ends Higher On Iraq Violence

June 16, 2014

WASHINGTON (Alliance News) - Gold futures rallied to end higher for a sixth straight session Monday, on safe haven appeal of the precious metal as the violence in Iraq continued to escalate with reports the US could collaborate with Iran to help the Iraqi government bring the country under its control.

Nevertheless, the gains made by the precious metal were limited after some upbeat economic data out of the US with both industrial production and homebuilder confidence rising more than expected.

Gold for August delivery, the most actively traded contract, moved up USD1.20 or 0.1% to close at USD1,275.30 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

Gold for August delivery scaled an intraday high of USD1,285.10 and a low of USD1,272.50 an ounce.

On Friday, gold futures ended a shade higher, extending gains to a fifth straight session. For the week, gold futures gained 1.7%. Gold rose as the turmoil in Iraq for control of major cities continued unabated, even as investors weighed some soft economic news out of the US While a report from Thomson Reuters and University of Michigan showed an unexpected deterioration in US consumer sentiment in June, data from the Labor Department showed an unexpected drop in US producer prices in May.

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

The dollar index, which tracks the US unit against six major currencies, traded at 80.47 on Monday, down from its previous close of 80.61 late Friday in North American trade. The dollar scaled a high of 80.71 intraday and a low of 80.42.

The euro traded higher against the dollar at USD1.3568 on Monday, as compared to its previous close of USD1.3541 late Friday in North American trade. The euro scaled a high of USD1.3580 intraday and a low of USD1.3514.

In economic news from the US, a report from the Federal Reserve of New York showed that manufacturing activity in New York region to have risen unexpectedly in June with the Empire State general business conditions index inching up to 19.3, from 19.0 in May. Economists expected the index to slip to 15 in June.

In a separate report, the Federal Reserve said industrial production in May increased by 0.6% following a revised 0.3% decrease in April. Economists expected production to climb by about 0.5%.

A report from the National Association of Home Builders showed homebuilder confidence to have improved more than expected in June. The NAHB/Wells Fargo Housing Market Index climbed to 49 in June from 45 in May. Economists expected the index to edge up to 47.

Meanwhile, the two-day Federal Reserve meeting kick starts on Tuesday, with the central bank also scheduled to release its updated forecasts apart from the post-meeting policy statement.

Investors will be looking ahead to the Commerce Department's housing starts report for May and the jobless claims report this week.

Additionally, the Labor Department's consumer prices report for May, the Commerce Department's quarterly current account report, the Conference Board's leading economic indicators index for May and announcements concerning the Treasury auctions of 2-year, 5-year and 7-year notes are also due this week.

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Source: Alliance News

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