Gold futures settled lower Friday, on some upbeat data from the U.S. with durable goods orders rebounding more than anticipated in April. The downturn in gold prices comes ahead of an extended weekend despite the dollar turning weak against some major currencies and declining global equity markets. For the week, gold prices gained 1.6 percent.
The dollar continued to be impacted after the U.S. Federal Reserve Chairman Ben Bernanke earlier in the week indicated the central bank would likely scale down its quantitative easing program in the coming months.
After reporting a sharp drop in new orders for manufactured durable goods in the previous month, a Commerce Department report Friday showed durable goods orders in April rebounded 3.3 percent which was more than what analysts expected.
Gold for June delivery, the most actively traded contract, dropped $5.20 or 0.4 percent to close at $1,386.60 an ounce Friday on the Comex division of the New York Mercantile Exchange.
Gold for June delivery scaled an intraday high of $1,397.10 and a low of $1,382.3 an ounce.
Yesterday, gold rose nearly 2 percent tracking declining global equity markets with the dollar turning weak against some major currencies after the U.S. Federal Reserve Chairman Ben Bernanke yesterday indicated the central bank would likely cut down its quantitative easing program in the near future. Investors largely ignored a slew of positive macroeconomic data out of the U.S., even as China's manufacturing sector contracted for the first time in seven months in May. The drop comes amid poor demand, fueling concerns of weakness in the economy that may persist for some more time.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 1,018.57 tons from 1,020.07 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.65 on Friday, down from 83.75 late Thursday in North American trade. The dollar scaled a high of 83.96 intraday and a low of 83.43.
The euro traded lower against the dollar at $1.2924 on Friday, as compared to $1.2934 late Thursday in North America. The euro scaled a high of $1.2993 intraday and a low of $1.2906.
In economic news from the U.S., the Commerce Department said durable goods orders surged 3.3 percent in April after tumbling by a revised 5.9 percent in March. Economists expected orders to climb 1.1 percent compared to the 5.7 percent decline reported in the previous month. Excluding a rebound in orders for transportation equipment, durable goods orders rose by 1.3 percent in April compared to a 1.7 percent drop in March.
From the eurozone, Germany's consumer confidence is set to strengthen in June, results of a survey by market research firm GfK showed. The forward-looking index for June rose to 6.5 in June from 6.2 in May. Economists had forecast the indicator to remain unchanged at 6.2. Economic expectations as well as income expectations of consumers improved in May. Following a moderate fall in April, economic expectations gained 1.3 points to -0.2.
Meanwhile, Germany's business sentiment improved to 105.7 in May from 104.4 in April, reports said citing a survey from the Ifo institute. The reading was forecast to remain unchanged at 104.4.
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