WASHINGTON (Alliance News) - Gold futures ended higher for a sixth straight session on Wednesday, after the dollar weakened against a basket of few major currencies on some soft economic data from the US with gross domestic product declining much more than previously estimated in the first quarter.
The precious metal prices dipped earlier in the session on some profit taking, but rallied on support from weakness in global equity markets with most European and Asian stocks ending lower. Investors also weighed developments in the Middle East with worries over the escalating violence in Iraq where militants have reportedly attacked an important airbase.
In some soft economic news from the US, a Commerce Department report on Wednesday showed economic activity in the US decreased much more than previously estimated in the first quarter of 2014. Meanwhile, new orders for US manufactured durable goods in May showed an unexpected drop, with orders for transportation equipment declining significantly.
Gold for August delivery, the most actively traded contract, gained USD1.30 or 0.1% to close at USD1,322.60 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.
Gold for August delivery scaled an intraday high of USD1,325.60 and a low of USD1,305.40 an ounce.
On Tuesday, gold futures ended higher for a fifth straight session on the precious metal's safe haven appeal boosted mainly by the ongoing Iraq imbroglio.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 785.02 tons from its previous close of 782.62 tons.
The dollar index, which tracks the US unit against six major currencies, traded at 80.19 on Wednesday, down from its previous close of 80.32 late Tuesday in North American trade. The dollar scaled a high of 80.35 intraday and a low of 80.09.
The euro traded higher against the dollar at USD1.3638 on Wednesday, as compared to its previous close of USD1.3607 late Tuesday in North American trade. The euro scaled a high of USD1.3651 intraday and a low of USD1.3600.
In economic news from the US, a Commerce Department report showed first quarter US GDP to have decreased 2.9%, compared to the previously estimated 1.0% drop. Economists expected the revised data to show a 1.8% decline.
Meanwhile, another report from the Commerce Department showed durable goods orders to have unexpectedly declined by a seasonally adjusted 1% in May. Excluding transportation items, orders were down by a seasonally adjusted 0.1% in May. Economists expected a 0.4% month-over-month increase in durable goods orders. Excluding transportation, orders were expected to rise 0.3%.
Meanwhile, service sector activity in the US grew at a faster rate, with Markit's reading for the sector coming in at 61.2 in June, up from 58.4 in the previous month.
German consumer confidence is set to improve to the highest since 2006 in July, as economic expectations and willingness to spend strengthened after the European Central Bank lowered its key rate early this month. The forward-looking consumer sentiment index rose to 8.9 in July from a revised 8.6 points in June, survey data from market research group GfK showed Wednesday. Economists had forecast the indicator to rise to 8.6 points from June's original estimate of 8.5.