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Gold Rebounds To End Higher

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Gold futures settled higher Friday, on some soft macroeconomic data out of the U.S. with industrial production coming in unexpectedly flat in May and the consumer sentiment index deteriorating. Gold prices also found some support on news reports that the Federal Reserve would make efforts to quell concerns related to the tapering down of its monetary easing program.

With a sharp drop in utilities output offsetting increases in mining and manufacturing output, U.S. industrial production unexpectedly came in unchanged in the month of May, a U.S. Federal Reserve report showed Friday. Meanwhile, consumer sentiment in the U.S. unexpectedly deteriorated in June, with the consumer sentiment index pulling back off a near six-year high, a report from Thomson Reuters and the University of Michigan showed.

On a positive note, producer prices in the U.S. rose more than anticipated in May, with growth largely attributed to a notable rebound in energy prices, a Labor Department report said Friday.

Gold for August delivery, the most actively traded contract, gained $9.80 or 0.7 percent to close at $1,387.60 an ounce Friday on the Comex division of the New York Mercantile Exchange.

Gold for August delivery scaled an intraday high of $1,391.80 and a low of $1,377.80 an ounce.

Yesterday, gold settled lower on some upbeat, better than expected weekly initial jobless claims and May retail sales data from the U.S., fueling speculations the Federal Reserve could well cut back on its quantitative easing program sooner than expected.

The dollar made gains against the euro on Friday with producer prices exceeding expectations, an indicative sign of an improving economy. Nevertheless, some soft consumer sentiment data checked gains made by the dollar against some major currencies.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.69 on Friday, down from 80.72 late Thursday in North American trade. The dollar scaled a high of 81.01 intraday and a low of 80.59.

The euro traded lower against the dollar at $1.3333 on Friday, as compared to $1.3375 late Thursday in North America. The euro scaled a high of $1.3374 intraday and a low of $1.3296.

In economic news, the U.S. Federal Reserve said industrial production in May came in flat, following a revised 0.4 percent decrease in April. Economists expected production to rise by 0.2 percent compared to the 0.5 percent drop originally reported for the previous month. While mining output rose by 0.7 percent in May after rising by 1.1 percent in April, manufacturing output inched up by just 0.1 percent following a 0.4 percent drop in the previous month.

Consumer sentiment in the U.S. unexpectedly deteriorated in June, with a preliminary reading on the consumer sentiment index at 82.7, down from the final May reading of 84.5, according to a Thomson Reuters and the University of Michigan report. Economists expected the index to come in unchanged compared to the previous month.

The U.S. Labor Department said its producer price index rose by 0.5 percent in May following a 0.7 percent decrease in April. Economists expected producer prices to edge up by 0.2 percent.

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