The price of gold was moving higher Tuesday morning amid speculation of a rate cut out of Europe this week and on mixed US dollar.
Gold for April delivery, the most actively traded contract, added $10.00 to $1,582.40 an ounce. Yesterday, gold settled almost flat with the dollar dropping against some major currencies. Investors sought the safe haven status of the precious metal with global equities declining on the impact of the sequester in the US, indicated with automatic spending cuts, and China concerns. Last week, the precious metal dropped to a seven-month low, mostly tracking rising global equity markets.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 1,253.28 tons from 1,253.88 tons.
Meanwhile, the U.S. dollar was hovering around its 2-month high versus the euro, while leveling off from its 30-month high against sterling. The buck was trading around its two-and half year high versus the yen and ticking higher against the Swiss franc.
In economic news, an indicator of eurozone's service sector activity declined in February, but the rate of fall was less steeper than estimated earlier, detailed results of a survey by Markit Economics showed. The services activity index rose to 47.9 in February from 48.6 in January. The flash reading was 47.3. An index reading below 50 indicates contraction of the sector.
Retail sales in the eurozone increased more than economists expected in January, recovering from the previous month's decrease, latest data showed. Retail sales volume increased 1.2 percent on a monthly basis in January, reversing the previous month's 0.8 percent decrease, which was revised from 0.9 percent, statistical office Eurostat said. Economists had forecast sales to rise 0.3 percent.
Elsewhere, Germany's private sector expanded more than estimated in February, survey data from Markit Economics showed. The final composite output index - which measures the combined output of the manufacturing and service sectors, came in at 53.3 in February, above the flash estimate of 52.7.
Elsewhere, the prices of silver and platinum were moving higher in morning deals.
From the U.S., the Institute for Supply Management is scheduled to release the results of its non-manufacturing survey at 10 a.m. ET. Economists expect the index to edge down to 55 in February from 55.2 in January.
by RTT Staff Writer
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