Gold futures settled higher Wednesday, rebounding from a near four-week low yesterday, even as investor anxiety persisted over the the outcome of the two-day U.S. Federal Reserve's policy meet. With no major macroeconomic data available today, there were little catalysts to provide fresh direction for gold. Nevertheless, the precious metal found some support with the dollar weakening against a basket of major currencies.
Investors continued to await the Federal Reserve Chairman Ben Bernanke's comments on the monetary policy forward, with the precious metal under pressure on speculations the central bank would likely taper its quantitative easing program. The continuation of the monetary stimulus is essentially bullish for gold, but in the short term, the absence of clear signs is a negative for the precious metal.
Gold for August delivery, the most actively traded contract, gained $7.10 or 0.5 percent to close at $1,374.00 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.
Gold for August delivery scaled an intraday high of $1,375.30 and a low of $1,364.00 an ounce.
Yesterday, the precious metal settled at a four-week low ahead of the two-day Federal Reserve's policy meet outcome and on some promising macroeconomic data out of the U.S.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 1,001.66 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.52 on Wednesday, down from 80.69 late Tuesday in North American trade. The dollar scaled a high of 80.74 intraday and a low of 80.50.
The euro traded higher against the dollar at $1.3404 on Wednesday, as compared to $1.3393 late Tuesday in North America. The euro scaled a high of $1.3412 intraday and a low of $1.3386.
In economic news, eurozone construction output increased in April, reversing the decline in March, data from Eurostat revealed Wednesday. Production in construction rose 2 percent month-on-month in April following a 1.8 percent drop in March and a 1.3 percent increase in February. Compared with April 2012, production decreased 6.6 percent. This followed a 7.3 percent year-on-year decline in March.
Spain's merchandise trade shortfall decreased significantly from last year in April as exports increased at a notably faster rate than imports, data from the country's Commerce Ministry showed Wednesday. The net trade for April resulted in a deficit of 1.64 billion euros, which was 51.1 percent lower than in the same month last year.
Elsewhere, Portugal's producer price inflation quickened moderately in May after easing in the previous month, data released by Statistics Portugal showed Wednesday. The producer price index increased 0.8 percent year-on-year in May, following the previous month's 0.5 percent gain. In March, the index recorded a 1.4 percent growth.
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