Gold futures snapped a four-day winning streak to settle lower Tuesday, mostly on profit taking ahead of the crucial European Central Bank meet later this week and the U.S. Federal Reserve policy meet beginning today. Despite high hopes of further quantitative easing forthcoming in the policy meetings, there were widespread apprehension and skepticism if anything would be done at all or if enough would be done to effectively tide over the economic crisis.
Gold for August delivery shed $9.20 or 0.6 percent to close at $1,610.50 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.
Gold for August delivery traded at an intraday high of $1,627.50 an ounce and a low of $1,610.00 an ounce.
Gold for December delivery, the most actively traded contract, dropped $9.4 or 0.6 percent to close at $1,614.60 an ounce Tuesday.
Nevertheless, gold prices for the month gained 0.4 percent.
Gold ended marginally higher yesterday, on hopes of further monetary stimulus measures ahead of the European Central Bank and Federal Reserve policy meet later this week.
The euro traded higher against the dollar at $1.2277 on Tuesday, as compared to $1.2256 late Tuesday in North America. The euro scaled a high of $1.2330 intraday and a low of $1.2250.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.705 on Tuesday, down from from 82.829 in North American trade late Monday. The dollar scaled a high of 82.89 intraday and a low of 82.51.
In economic news from the U.S., the Commerce Department said personal income in the country had risen by $61.8 billion in June, an increase of 0.5 percent. The increase was higher than the 0.4 percent predicted by most economists and comes atop revised figures that showed the May increase in personal income of 0.3 percent was higher than the 0.2 percent initially reported. However consumer spending, known formally as personal consumption expenditures fell marginally in June, dropping $1.3 billion.
A report by Standard & Poor's showed the S&P/Case-Shiller 20-City Composite Home Price Index rose by 2.2 percent in May following a 1.3 percent increase in April. Economists expected the index to increase by 1.2 percent.
From Europe, data from the Eurostat revealed eurozone inflation remained stable in July, in line with economists' expectations. The annual rate came in at 2.4 percent, which is above the central bank's target of "below but close to 2 percent."
A separate report from the agency indicated eurozone unemployment rate remained unchanged at a record high in June. The jobless rate for June was 11.2 percent, the same as in May. The rate was in line with economists' expectations.
Elsewhere, unemployment in Germany increased in July as widely expected, data from the Federal Labor Agency showed. The number of unemployed rose by 7,000 in July from a month earlier. This was in line with economists' forecast and followed a similar increase in the previous month.
Meanwhile, Germany's retail sales dropped unexpectedly in June from the prior month, data from the Federal Statistical Office revealed. Retail turnover was down 0.1 percent from May, in contrast to a 0.5 percent rise expected by economists. Nonetheless, the rate of decline was slower than the 0.3 percent drop in May.
by RTT Staff Writer
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