News Column

Gold Ends Higher On Weak Dollar; Gains 0.3% For Week

June 27, 2014

WASHINGTON (Alliance News) - Gold futures ended higher on Friday, due mainly to a weak dollar with investors looking for fresh triggers after a recent run-up in bullion prices.

Nonetheless, the gains were limited with markets continuing to closely monitor the situation in Iraq where the parliament is scheduled to meet on Tuesday to discuss the process of forming a new government.

Gold futures gained about 0.3% for the week -- the fourth consecutive week of gain for the precious metal.

Hawkish remarks from a top Federal Reserve official also weighed on gold prices. St. Louis Fed President James Bullard in an interview on the Fox Business Network Thursday said US inflation looks likely to rise back to 2% later this year, which may allow the Fed to hike interest rates by end of the first quarter 2015.

Gold for August delivery, the most actively traded contract, gained USD3.00 or 0.2% to close at USD1,320.00 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for August delivery scaled an intraday high of USD1,323.10 and a low of USD1,313.20 an ounce.

On Thursday, gold futures ended lower snapping a six-day winning streak, on profit taking and a stronger dollar.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 785.02 tons on Friday from its previous close.

The dollar index, which tracks the US unit against six major currencies, traded at 80.06 on Friday, down from its previous close of 80.21 late Thursday in North American trade. The dollar scaled a high of 80.22 intraday and a low of 80.04.

The euro traded higher against the dollar at USD1.3641 on Friday, as compared to its previous close of USD1.3611 late Thursday in North American trade. The euro scaled a high of USD1.3645 intraday and a low of USD1.3610.

In economic news from the US, a Thomson Reuters and the University of Michigan report showed an upward revision in consumer sentiment to a reading of 82.5 in June, from the preliminary reading of 81.2. With the upward revision, the index exceeded economist estimates and came in above the final May reading of 81.9.

Industrial profit rose in May, although at a slower rate than in the previous month, data from China'sNational Bureau of Statistics showed on Friday. The growth in industrial profit slowed to 8.9% on year in May after profit surged 9.6% in April. Profit for the five months ended May were up 9.8%, edging down from the 10% growth for the four months ended April.

Eurozone economic confidence weakened unexpectedly in June from a 34-month high as the region struggles to lift its growth momentum in the second quarter, with deterioration in industry, construction and consumer confidence. The economic sentiment index fell to 102 in June from a revised 102.6 in May, a survey by the European Commission showed Friday. It was forecast to rise to 103. Nonetheless, the score remains above its long-term average.

UK house price inflation picked up further in May, data from Land Registry showed Friday. House prices advanced 6.7% year-on-year in May, faster than the 6.3% rise in April. At 18.5%, the annual increase for London was considerably higher than other regions.

On a monthly basis, overall house prices gained 0.4 versus 1.2 rise in April. This was the second consecutive monthly increase. London again experienced the greatest monthly rise with a movement of 2.5%

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Source: Alliance News

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