Gold Ends Lower As Dollar Strengthens

Gold futures ended at a three-week low on Tuesday, with the dollar strengthening against a select band of major currencies even as investors remained focused on the upcoming European Central Bank policy meet with speculation the central bank may cut interest rates to further boost the economy.  Gold for December delivery, the most actively traded contract, shed $6.60 to close at $1,308.10 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.
Gold for December delivery scaled an intraday high of $1,320.60 and a low of $1,305.20 an ounce.  Yesterday, gold settled marginally higher as the dollar weakened against some major currencies and on hopes the U.S. Federal Reserve would not taper its quantitative easing program in the near future. Gold prices were also supported by some speculation the European Central Bank may cut interest rates to further boost its economy.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged at 866.32 tons. The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.69 on Tuesday, up from 80.58 late Monday in North American trade. The dollar scaled a high of 80.81 intraday and a low of 80.50.
The euro traded lower against the dollar at $1.3476 on Tuesday, as compared to its previous close of $1.3514 late Monday in North America. The euro scaled a high of $1.3523 intraday and a low of $1.3450.
In economic news from the U.S., the Institute for Supply Management said its non-manufacturing index climbed to 55.4 in October from 54.4 in September, with a reading above 50 indicating growth in the service sector. The modest increase came as a surprise to economists, who had been expecting the index to dip to a reading of 54.0. Elsewhere, eurozone economic growth is set to gather pace over the forecast horizon, but the return to solid growth will be a gradual process, the European Commission said in its Autumn Forecast. The commission estimates euro zone GDP to shrink 0.4 percent this year, unchanged from the previous estimate. Meanwhile, the outlook for next year was lowered marginally to 1.1 percent from 1.2 percent.
Elsewhere, British retail sales picked up in October, with lower food and clothing sales limiting overall gains. Sales rose 0.8 percent year-over-year following the 0.7 percent improvement seen in September, the British Retail Consortium reported.
Switzerland’s consumer prices declined further in October, and the rate of fall exceeded economists’ expectations, latest data showed. The consumer price index dropped 0.3 percent in October from the same month of last year, following a 0.1 percent decline in September, the Federal Statistical Office said. Economists had forecast a 0.1 percent for October.
Source: RTT Staff Writer
Source:Bullion Bulletin

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