News Column

Gold Rallies To End Slightly Higher On Weak US Data

August 14, 2014

WASHINGTON (Alliance News) - Gold futures rallied to end slightly higher for a third straight session Thursday, on some disappointing economic data from the US with first-time claims for unemployment benefits rising more than expected last week.

With some soft July retail sales data from the US and a slower growth in China's industrial production, investors continue to speculate if the Federal Reserve would continue to hold interest rates competitive for an extended period of time.

Elsewhere, eurozone recovery unexpectedly stagnated in the second quarter with Germany and Italy shrinking from the prior quarter. This is likely to prompt the central bank to step up stimulus actions.

Investors also kept an eye on the situation in Ukraine, with a convoy of 280 Russian trucks is on its way to eastern Ukraine with humanitarian aid.

Gold for December delivery, the most actively traded contract, inched up USD1.20 or 0.01% to close at USD1,315.70 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for December delivery scaled an intraday high of USD1,321.80 and a low of USD1,310.00 an ounce.

On Wednesday, gold futures ended higher after some disappointing US retail sales data for July with China's industrial production also growing at a slower pace in July.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged lower to 795.60 tons on Thursday from its previous close of 795.86 tons on Wednesday.

The dollar index, which tracks the US unit against six major currencies, traded at 81.60 on Thursday, down from its previous close of 81.61 late Wednesday in North American trade. The dollar scaled a high of 81.69 intraday and a low of 81.41.

The euro traded higher against the dollar at USD1.3368 on Thursday, as compared to its previous close of USD1.3365 late Wednesday in North American trade. The euro scaled a high of USD1.3407 intraday and a low of USD1.3350.

In economic news from the US, initial jobless claims rose more than expected to 311,000, up 21,000 from the previous week's revised level of 290,000. Economists expected jobless claims to edge up to 295,000 from the 289,000 originally reported for the previous week.

Another report from the Labor Department showed import prices to have edged down 0.2% in July, after inching up by 0.1% in June. Forecast was for a drop of 0.3% in import prices. Export prices were unexpectedly unchanged in July following a 0.4% drop in the previous month.

Meanwhile, economic recovery in the eurozone unexpectedly came to a halt in the second quarter, with Germany and Italy shrinking from the prior quarter. GDP was flat in the June quarter, after seeing an increase of 0.2% in the preceding quarter.

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Source: Alliance News

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