Gold futures settled sharply lower for a third straight day Wednesday, as the dollar continued to strengthen against a basket of major currencies. Investor concerns over the eurozone crisis increased on speculations that Greece is preparing for an eurozone exit and skepticism on the outcome of the European Union summit meeting.
The informal European leaders summit is scheduled to discuss proposals to boost growth in the region and the idea of a joint euro-zone bond, which is strongly opposed by Germany.
Gold for June delivery, the most actively traded contract, declined $28.20 or 1.8 percent to close at $1,548.40 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,568.50 an ounce and a low of $1,532.80 an ounce.
Yesterday, gold extended losses on a strong dollar and investor concerns persisted on the eurozone crisis with continued focus on Greece and the Spanish banks. Adding to concerns were the Organization for Economic Cooperation and Development's warning that the eurozone crisis could derail the global economy.
Earlier, the U.S. dollar moved up toward a two-year high versus the euro and traded around a two-month high against sterling. Nevertheless, the buck moved lower against the yen and ticked higher versus the Swiss franc.
The dollar index, which tracks the U.S. unit against six major currencies, was trading higher at 82.084 on Wednesday, from 81.674 in North American trade late Tuesday. The dollar scaled a high of 82.22 intraday and a low of 81.57.
The euro traded lower against the dollar at $1.2563 on Wednesday, as compared to $1.2684 late Tuesday. The euro scaled a high of $1.2688 intraday and a low of 1.2546.
In economic news from the Europe, retail sales in the U.K. declined at the fastest pace in two years as April's wettest weather on record damped consumer spending, the latest official figures revealed. The Office for National Statistics said that retail sales volume, including automotive fuel, dropped 2.3 percent from a month ago, much faster than the 0.8 percent decrease forecast by economists. This was the biggest drop since January 2010 and followed a revised 2 percent growth in March.
From the U.S., the Commerce Department said that new home sales rose 3.3 percent to an annual rate of 343,000 in April from the revised March rate of 332,000. Economists had expected new home sales to climb to 335,000 from the 328,000 originally reported for the previous month.
by RTT Staff Writer
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