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Gold Settles Marginally Lower As Dollar Strengthens

11/7/2012 2:04 PM ET

Gold futures ended marginally lower Wednesday after the dollar strengthened against some of the major currencies, even as the euro declined on concerns over the eurozone financial crisis. Nonetheless, President Barack Obama's reelection for a second term somewhat limited the precious metal's slide, reigniting hopes of continued monetary stimulus support in the world's largest economy.

In Greece, the parliament will vote on the proposed austerity measures as demanded by the country's international creditors for the next installment of the bailout aid. Analysts believe the proposals would go through albeit narrowly. Any failure to get the measures approved would mean doom for Greece as it is likely to run out of funds end November.

In the U.S., equity markets took a deep dive over fiscal cliff worries following President Obama's reelection and as well on concerns over the eurozone debt crisis.

Gold for December delivery, the most actively traded contract, shed $1.00 or 0.06 percent to close at $1,714.00 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery traded at an intraday high of $1,733.00 and a low of $1,703.00 an ounce.

Yesterday, gold settled above the $1,700-mark for the first time in two days mostly as investors sought the safe haven status of the precious metal while awaiting the outcome of the U.S. presidential elections.

The euro traded lower against the dollar at $1.2763 on Wednesday, as compared to $1.2815 late Tuesday in North America. The euro scaled a high of $1.2877 intraday and a low of $1.2738.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.80 on Wednesday, up from 80.63 in North American trade late Tuesday. The dollar scaled a high of 80.92 intraday and a low of 80.28.

In economic news, retail sales in the euro area decreased at a slightly faster rate than economists expected in September, after recording a modest increase in the previous month, data from Eurostat showed. Retail sales volume decreased 0.2 percent month-on-month in September, reversing the previous month's 0.2 percent rise. Economists had forecast a more modest decrease by 0.1 percent for September.

Meanwhile, Germany's industrial production declined 1.8 percent in September from a month ago, the Federal Ministry of Economics and Technology said. It follows a slower 0.4 percent drop in August and exceeded a 0.7 percent decline forecast by economists. Industrial production adjusted for working days, slipped unexpectedly by 1.2 percent annually after falling 1.3 percent in August. Economists had forecast output to grow 0.1 percent.

by RTT Staff Writer

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