Gold futures snapped a two-day gain to end sharply lower Wednesday, after some upbeat global macroeconomic data out of the U.S. and Europe, and on developments in Italy. Political parities in Italy have begun exploring possibilities of forming a government after initial rhetoric from various groups to the contrary.
In some encouraging economic news, pending home sales in the U.S. rebounded more than expected in January, a report from the National Association of Realtors showed Wednesday. Meanwhile, new orders for U.S. manufactured durable goods dropped more than expected in January, although orders actually rose much more than expected when excluding orders for transportation equipment.
Elsewhere, an European Commission survey showed the eurozone economic confidence to have improved for the fourth straight month in February.
Gold for April delivery, the most actively traded contract, dropped $19.80 or 1.2 percent to close at $1,595.70 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.
Gold for April delivery scaled an intraday high of $1,614.40 and a low of $1,592.60 an ounce.
Yesterday, gold settled near a two-week high, with investors upbeat after the Federal Reserve Chairman Ben Bernanke downplayed speculation that the central bank is getting ready to end its quantitative easing program. Investors also sought safe haven in the precious metal, even as the euro turned lower, following the political deadlock in Italy fueling renewed concerns over recovery efforts in the eurozone economy.
The euro traded higher against the dollar at $1.3101 on Wednesday, as compared to $1.3061 late Tuesday in North America. The euro scaled a high of $1.3129 intraday and a low of $1.3042.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.70 on Wednesday, down from 81.85 late Tuesday in North American trade. The dollar scaled a high of 81.92 intraday and a low of 81.50.
In economic news from the U.S., the Commerce Department said durable goods orders tumbled by 5.2 percent in January after jumping by a revised 3.7 percent in December. Economists had expected orders to fall by 4.0 percent compared to the 4.3 percent increase that had been reported for the previous month. Nevertheless, excluding the sharp drop in orders for transportation equipment, durable goods orders actually rose by 1.9 percent in January compared to a 1.0 percent increase in December. Ex-transportation orders had been expected to edge up by 0.2 percent.
Pending home sales in the U.S. rebounded more than expected in January, a report from the National Association of Realtors indicated Wednesday. The NAR pending home sales index rose by 4.5 percent to 105.9 in January after falling 1.9 percent to 101.3 in December. Economists expected the index to increase by 3.0 percent.
In economic news from the eurozone, confidence among German households is set to improve for the second straight month in March, with expectations turning more optimistic as the financial crisis in the euro area is calming down, fueling hopes that recovery will gather momentum in the early months of the year, a monthly survey revealed. The results of a forward-looking survey by the GfK showed that the consumer confidence index based on the survey will rise to 5.9 in March from 5.8 in February, marking the second consecutive monthly growth. The projection is in line with economists' forecast.
The British economy contracted 0.3 percent quarter-on-quarter in the fourth quarter, unrevised from the previous estimate, the latest figures from the Office for National Statistics showed. The third quarter GDP figures were revised up to show a 1 percent growth for the period compared to 0.9 percent growth reported initially.
Eurozone economic confidence improved for the fourth straight month in February, survey data from the European Commission showed. The economic sentiment index came in at 91.1, up from 89.5 in the prior month. The reading stayed above the consensus forecast of 89.9.
by RTT Staff Writer
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