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Gold Ends Slightly Lower On Gaza, Ukraine

July 23, 2014

Washington (July 23)  Gold futures slipped for a second straight session to end slightly lower on Tuesday, with investors opting for riskier assets tracking rising global equity markets. Nonetheless, the losses were limited due mainly to the escalating tensions in  Gaza  where fighting between  Israel  and  Hamas  rages on unabated.

While persisting worries about the situation in  Gaza  and  Ukraine  support the yellow metal, optimism about strong corporate earnings appears to be limiting its upside.

Meanwhile, reports from  Ukraine  say pro-Russian rebels have shot down two Ukrainian fighter jets, close to the location of the Malaysian passenger plane crash in eastern  Ukraine  late last week.

Gold for August delivery, the most actively traded contract, slipped  USD1.60  or 0.1% to close at  USD1,304.70  an ounce on the Comex division of the  New York Mercantile Exchange  on Wednesday.

Gold for August delivery scaled an intraday high of  USD1,311.80  and a low of  USD1,303.50  an ounce.

On Tuesday, gold futures ended lower, as investors chose riskier assets on the back of strong global equity markets. The escalating tension in  Gaza  and  Ukraine  also helped gold futures to limit losses.

Holdings of  SPDR Gold Trust  , the world's largest gold-backed exchange-traded fund, edged up to 804.84 tons on Wednesday, from its previous close of 803.34 tons on Tuesday.

The dollar index, which tracks the US unit against six major currencies, traded at 80.80 on Wednesday, up from its previous close of 80.78 late Tuesday in North American trade. The dollar scaled a high of 80.83 intraday and a low of 80.72.

The euro traded lower against the dollar at  USD1.3462  on Wednesday, as compared to its previous close of  USD1.3465  late Tuesday in North American trade. The euro scaled a high of  USD1.3474  intraday and a low of  USD1.3456  .

In economic news, euro area consumer confidence deteriorated for a second straight month in July, preliminary data from the  European Commission  showed Wednesday. The flash consumer confidence index for Eurozone fell to -8.4 from -7.5 in June. Economists had forecast the score remain unchanged.

The confidence index for the EU declined by 1.2 points to -5.5. The final figures will be released along with the economic sentiment data on  July 30  .

 Bank of England Governor Mark Carney  said Wednesday the interest rate will have to start rising to maintain price stability as the economy normalizes.

Meanwhile, Bank of  England  policymakers unanimously decided to maintain the key interest rate and quantitative easing at the meeting held on  July 9  and 10, but signaled the possibility of a rate hike late this year as growth became more established.

Source: AllianceNews
 

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