News Column

Gold Ends Lower For Sixth Straight Day

June 2, 2014

WASHINGTON (Alliance News) - Gold futures dropped for a sixth straight session to end slightly lower on Monday, with investors opting for the riskier equity assets tracking rising global equity markets, even as the dollar trended higher against some major currencies. A strong dollar makes oil more expensive to international buyers holding foreign currencies.

Rebounding stocks and concerns about physical demand have also diminished appetite for the precious metal in recent weeks.

Gold for August delivery, the most actively traded contract, dropped USD2.00 or 0.2% to close at USD1,244.00 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

Gold for June delivery scaled an intraday high of USD1,251.00 and a low of USD1,241.10 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 785.28 tons on Monday from its previous close.

The dollar index, which tracks the US unit against six major currencies, traded at 80.62 on Monday, up from its previous close of 80.39 late Friday in North American trade. The dollar scaled a high of 80.68 intraday and a low of 80.39.

The euro traded lower against the dollar at USD1.3601 on Monday, as compared to its previous close of USD1.3636 late Friday in North American trade. The euro scaled a high of USD1.3640 intraday and a low of USD1.3588.

In economic news, US manufacturing sector in May grew at its fastest pace this year, with the purchase managers index rising to 55.4% from 54.9% in April, according to a report from the Institute for Supply Management. Economists expected the index at 55.8% for May.

In economic news, construction spending in the US rose less than expected in April, with spending edging up 0.2% to an annual rate of USD953.5 billion from the revised March estimate of USD951.6 billion. Economists expected spending to increase by about 0.6%. Nonetheless, the report also showed notable upward revisions to the spending seen in the two previous months. Construction spending rose 0.6% in March and 0.4% in February.

Germany's inflation slowed more than expected in May to its lowest since June 2010, flash estimates published by Destatis revealed Monday. Inflation, based on the consumer price index, dropped to 0.9% in May, the level last seen in June 2010, from 1.3% in April. This was also below the expected rate of 1.1%.

The harmonized index of consumer prices rose only 0.6% on a yearly basis in May. Inflation was expected to slow marginally to 1% from 1.1% seen in April. Month-on-month, consumer prices were down 0.1%, against expectations for a 0.1% rise. Similarly, harmonized prices slipped 0.3%, instead of a 0.1% rise forecast by economists.

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Source: Alliance News

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