Gold futures ended lower Tuesday, as investors anxiously await the outcome of a key European Union summit meeting due later this week, which is largely expected to fall short of resolving the eurozone debt crisis. Some weak economic data from the U.S. also acted as a dampener on gold prices.
The EU summit now faces some more significant developments with Cyprus formally seeking financial aid on Monday, following Spain's formal request to help its banking system earlier. As well late Monday, Moody's Investor Service downgraded the long-term debt and deposit ratings for 28 of the 33 rated Spanish banks and two issuer ratings, by one to four notches.
Any success at the summit were further dented after some news reports of comments attributed to the German Chancellor Angela made rounds. Merkel is reported to have indicated her opposition to any shared total debt liability in Europe, while interacting with coalition partners in her government.
Gold for August delivery, the most actively traded contract, dropped $13.50 or 0.9 percent to close at $1,574.90 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,588.40 an ounce and a low of $1,568.20 an ounce.
Yesterday, gold ended marginally higher on investor support ahead of the EU summit meet later this week, notwithstanding a rising dollar. Gold prices were helped by bargain hunting after the precious metal shed about 4 percent in the previous week.
The dollar slipped after some soft economic data from the U.S. and weak response to Spanish bonds earlier today.
The dollar index, which tracks the U.S. unit against six major currencies, pared much of the gains to trade lower at 82.40 on Tuesday from 82.46 in North American trade late Monday. The dollar scaled a high of 82.68 intraday and a low of 82.25.
The euro pared early losses but continued to trade lower against the dollar at $1.2481 on Tuesday, as compared to $1.2501 late Monday in North America. The euro scaled a high of $1.2530 intraday and a low of 1.2442.
In economic news, home prices in major U.S. metropolitan areas rose more than economists expected, a report by Standard & Poor's revealed. The S&P/Case-Shiller 20-City Composite Home Price Index rose by a seasonally adjusted 0.7 percent in April, matching the upwardly revised increase in March. Economists expected home prices to rise by 0.4 percent compared to the 0.1 percent increase originally reported for the previous month.
A separate report from the Conference Board showed consumer confidence index to have dropped to 62.0 in June from a downwardly revised 64.4 in May. Economists expected the index to slip to 63.5 from the 64.9 originally reported for the previous month.
In economic news from the eurozone, confidence among German consumers is likely to rise in July, a survey by market research group GfK indicated. The consumer confidence index for July rose to 5.8 from 5.7 in June. Economists expected the score to fall to 5.6 in July.
by RTT Staff Writer
For comments and feedback: firstname.lastname@example.org