Gold futures ended lower Thursday, mostly on investor skepticism on the outcome of the ongoing European Union summit meeting, a strengthening dollar and a significant decline is U.S. stocks. The EU summit meet is unlikely to offer any new solution to the eurozone financial problems, which could send investors scurrying to the safety of the U.S. dollar.
Gold for August delivery, the most actively traded contract, dropped $28.00 or 1.8 percent to close at $1,550.40 an ounce Thursday on the Comex division of the New York Mercantile Exchange.
Gold traded at an intraday high of $1,579.60 an ounce and a low of $1,547.60 an ounce.
Yesterday, gold ended marginally higher as investors weighed the outcome of the key European Union summit meeting due to start Thursday.
The dollar index, which tracks the U.S. unit against six major currencies, was trading at 82.806 on Thursday, up from 82.585 in North American trade late Wednesday. The dollar scaled a high of 82.83 intraday and a low of 82.24.
The euro traded lower against the dollar at $1.2421 on Thursday, as compared to $1.2468 late Wednesday in North America. The euro scaled a high of $1.2524 intraday and a low of 1.2408.
In economic news, the U.S. Commerce Department said the nation's GDP increased at an annual rate of 1.9 percent in the first quarter compared to the 3.0 percent growth seen in the fourth quarter. The unrevised pace of growth came in line with the expectations of economists.
Meanwhile, new claims for unemployment fell somewhat for the week but nevertheless remained slightly higher than predicted, according to the U.S. Labor Department. The level of initial unemployment claims were at a seasonally adjusted level of 386,000 for the week ending June 23, a decrease of 6,000 from the previous week's revised level of 392,000. Most economists expected a somewhat lower level of 385,000 new claims.
From the euro zone, unemployment in Germany increased more than expected in June, reports said citing data from the labor ministry. Unemployment rose by 7,000 in June from a month earlier compared to expectations for an increase of 3,000. The unemployment rate rose to 6.8 percent from 6.7 percent in May, while expectations were for a steady rate.
Meanwhile, euro zone economic confidence declined less than economists expected in June, survey results from European Commission showed. The economic confidence index fell to 89.9 in June from 90.5, but remains above the consensus forecast of 89.6. Falling confidence in industry, services and, to a lesser extent, among consumers was counterbalanced by improving confidence in retail trade and construction.
by RTT Staff Writer
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