WASHINGTON (Alliance News) - Gold futures moved up to end at a near four-month high on Thursday, after investors sought safer assets amid a sell-off in European equity markets with most global markets trending down. The precious metal turned higher even after he Federal Reserve said it would wind up its asset purchase program by October.
There was no change to the Fed's outlook on interest rates, with the central bank providing no indication as to when it is likely to start a tightening cycle. Investors also weighed some mixed economic data from the US and China, with US weekly jobless claims dropping more than expected and wholesale inventories rising less than expected.
Chinese exports expanded less than expected in June signaling that foreign demand provide insufficient support for the economy to achieve its 7.5% growth target.
Disappointing industrial production data from France and Italy has raised concerns about eurozone economic recovery, prompting investors to rush for the yellow metal. Meanwhile, the Bank of England has kept its interest rate at a historic low the size of quantitative easing at GBP 375 billion as expected by economists.
Gold for August delivery, the most actively traded contract, gained USD14.90 or 1.1% to close at USD1,339.20 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.
Gold for August delivery scaled an intraday high of USD1,346.80 and a low of USD1,325.00 an ounce.
On Wednesday, gold futures ended snapped a three-day loss to end higher after some weak economic data from the eurozone supported the yellow metal.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained at 800.28 tons on Thursday, unchanged from its previous close.
The dollar index, which tracks the US unit against six major currencies, traded at 80.16 on Thursday, up from its previous close of 80.03 late Wednesday in North American trade. The dollar scaled a high of 80.20 intraday and a low of 79.98.
The euro traded lower against the dollar at USD1.3603 on Thursday, as compared to its previous close of USD1.3641 late Wednesday in North American trade. The euro scaled a high of USD1.3651 intraday and a low of USD1.3590.
In economic news from the US, a report from the Labor Department first-time jobless claims to have unexpectedly declined to 304,000 in the week ended July 5, down 11,000 from the previous week's unrevised level of 315,000. Economists had expected claims to come in unchanged compared to the previous week.
Meanwhile, a report from the Commerce Department showed wholesale inventories in the US to have risen by a slightly less than anticipated 0.5% in May, after jumping by a revised 1.0% in April. Economists had expected inventories to climb by about 0.6% compared to the 1.1% increase originally reported for the previous month.
China's exports grew 7.2% in June from last year, data from the General Administration of Customs showed Thursday. Although the annual growth was faster than the 7% rise posted in May, it was below the 10.4% increase forecast by economists.
China's imports also climbed by a less-than-expected 5.5% in June. It reversed May's 1.6% fall but was weaker than the expected 6% growth. Trade surplus dropped to USD31.6 billion from USD35.9 billion in May, when it was forecast to rise to USD36.9 billion.
In economic news from Europe, France and Italy reported a notable drop in industrial output in May, while the Dutch industrial production grew at a slower rate in May.
Meanwhile, the Bank of England has kept its interest rate at a historic low with the size of quantitative easing at GBP 375 billion as expected by economists.