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Gold Continues To Slide, Ends On 5-Month Low

Gold futures continued to slide for a third straight day, to settle at a near five-month low Tuesday. The dollar continued to strengthen while the euro slipped further on political developments in Greece. The troubled nation is now surely headed for new elections in June, after failing to reach an agreement on a new coalition government.

Nevertheless, gold prices pared some of the early losses on some encouraging economic data from the eurozone, and some mixed data from the U.S. Global markets roiled, reacting sharply to Greece with the decline led mostly by commodities.

Gold for June delivery, the most actively traded contract, shed $3.90 or 0.3 percent to close at $1,557.10 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.

Gold traded at an intraday high of $1,564.40 an ounce and a low of $1,546.80 an ounce.

Gold prices plunged to a near five-month low yesterday, amid deepening concerns over the political uncertainties in Greece, while investors found safe haven in the dollar as the greenback continued to ride high against most major currencies.

Following the developments in Greece, the euro continued to trade sharply lower against the dollar at $1.2753 on Tuesday, as compared to $1.2840 late Monday. The euro scaled a high of $1.2870 intraday and a low of 1.2752.

The dollar index, which tracks the U.S. unit against six major currencies, was trading higher at 81.126 on Tuesday, from 80.612 in North American trade late Monday. The dollar scaled a high of 81.20 intraday and a low of 80.48.

In economic news, the German economy expanded more than expected in the first quarter of 2012, data released by the Federal Statistical Office showed. Gross domestic product rose 0.5 percent from the prior quarter, when it fell 0.2 percent. Economists had expected only 0.1 percent growth for the first quarter.

Separately, data from the Eurostat revealed that the euro zone economy avoided a recession in the first quarter. Gross domestic product for the 17-nation bloc remained flat sequentially after shrinking 0.3 percent in the fourth quarter. Economists expected a 0.2 percent contraction for the first quarter.

In economic news from the U.S, the Labor Department said that the seasonally adjusted consumer price index was unchanged in April, after a 0.3 percent gain in March. Excluding volatile food and gas costs, core prices rose 0.2 percent.

A report from the U.S. Commerce Department revealed that retail sales in saw a modest increase in the month of April. The report showed that retail sales edged up by 0.1 percent in April following a revised 0.7 percent increase in March. Economists had expected sales to increase by 0.1 percent compared to the 0.8 percent growth originally reported for the previous month. Excluding a 0.5 percent increase in auto sales, retail sales still rose by 0.1 percent in April compared to a 0.8 percent increase in the previous month.

Separately, the Federal Reserve Bank of New York said its general business conditions index jumped to 17.1 in May from 6.6 in April, with a positive reading indicating an increase in regional manufacturing activity. Economists had expected the index to show a more modest increase to a reading of 10.0.

by RTT Staff Writer

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