Gold futures ended sharply down to a near one-month low Thursday, on some weak economic data from the U.S. and a strengthening dollar. The Federal Reserve's failure to announce the much anticipated monetary stimulus after its policy meeting also impacted gold prices. In percentage terms, gold prices recorded a 3.1 percent drop, the biggest since early April.
In economic news from the U.S., the National Association of Realtors' report showed a slightly bigger than expected drop in U.S. existing home sales in May, while the Philadelphia-area manufacturing firms indicated weaker business conditions in June, a Federal Reserve Bank of Philadelphia report showed Thursday.
Gold for August delivery, the most actively traded contract, plunged $50.30 or 3.1 percent to close at $1,565.50 an ounce Thursday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,608.20 an ounce and a low of $1,564.80 an ounce.
Yesterday, gold extended losses for a third day after the Federal Reserve left its interest rate unchanged and extended Operation Twist bond swapping program citing a slowdown in jobs growth.
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 82.166 on Thursday, up from 81.567 in North American trade late Wednesday. The dollar scaled a high of 81.24 intraday and a low of 81.49.
The euro traded lower against the dollar at $1.2575 on Thursday, as compared to $1.2673 late Wednesday. The euro scaled a high of $1.2707 intraday and a low of 1.2554.
In economic news, first-time claims for U.S. unemployment benefits showed a modest decrease in the week ended June 16th, the Labor Department said Thursday. New unemployment claims came in at a seasonally adjusted level of 387,000 for the week, a decrease of 2,000 from the previous week's revised level of 389,000. Economists expected jobless claims to dip to 383,000 from the 386,000 originally reported for the previous week.
Reversing a slight decline in April, the Conference Board's index of leading U.S. economic indicators showed an unexpected increase by 0.3 percent in May, after edging down by 0.1 percent in April. Economists expected the index to remain unchanged.
Citing supply constraints rather than softening demand, the National Association of Realtors' report showed a slightly bigger than expected drop in U.S. existing home sales in May. Existing home sales declined by 1.5 percent to a seasonally adjusted annual rate of 4.55 million in May from 4.62 million in April. Economists expected a modest decrease to an annual rate of 4.57 million.
Philadelphia-area manufacturing firms indicated weaker business conditions in June, a report by the Federal Reserve Bank of Philadelphia showed Thursday. The Philly Fed's diffusion index of current activity dropped to a negative 16.6 in June from a negative 5.8 in May. A negative reading indicates contraction in regional manufacturing activity. Economists expected the index to rebound to a positive 0.5.
The index of regional manufacturing activity dropped to its lowest level since the negative 22.7 in August 2011.
Eurozone suffered another steep fall in private sector activity in June, the steepest in three years, as the fallout from the debt crisis engulfing the single-currency bloc continued to hit production and new orders. The Composite Output Index, which measures the performance of both manufacturing and service sectors, remained unchanged at 46, the lowest since June 2009, a survey by Markit Economics revealed. Economists expected a decline to a reading of 45.5.
Meanwhile, U.K. retail sales recovered at a faster than expected pace in May after easing in April, the Office for National Statistics said. Retail sales volume, including automotive fuel, rose 1.4 percent from the prior month, when it was down 2.4 percent. The increase was bigger than the expected growth of 1.2 percent.
by RTT Staff Writer
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