Gold Price Settles Lower Ahead Of Fed Policy Meet
Washington (Sept 8) Gold futures ended a shade lower for a fourth straight session Tuesday, ahead of the two-day Federal Open Market Committee meet next week, even as the dollar trended lower against some major currencies.
Some strong performances in global equity markets also impacted gold. China's Shanghai Composite Index jumped 2.9%, after a slew of support measures by Beijing . The measures included tax exemption on dividends and a move to introduce a market-wide circuit breaker system to stabilize the market also helped investors shrug off weak data underlying weakness in the world's second-largest economy.
Investors also weighed some disappointing economic data, as China revised its GDP growth rate for 2015 downward from 7.4% to 7.3%. Several economists believe Chinese GDP growth would likely fall below 7% for the third quarter.
From Europe , German exports expanded more-than-estimated in July, while the eurozone economy grew more than initially estimated in the second quarter.
Gold for December delivery, the most actively traded contract, dropped USD0.40 , to settle at USD1,121.00 an ounce, on the Comex division of the New York Mercantile Exchange on Tuesday.
Gold for December delivery scaled an intraday high of USD1,126.00 and a low of USD1,114.70 an ounce.
On Friday, gold prices for December delivery dropped USD3.10 or 0.3%, to settle at USD1,121.40 an ounce, after some soft US jobs data provided little cues to a likely interest rate hike in September by the Federal Reserve, even as the dollar trended lower. Gold futures shed about 1.1% last week.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, inched down to 682.35 tons on Tuesday from its previous close of 682.59 tons.
The dollar index, which tracks the US unit against six major currencies, traded at 95.98 on Tuesday, down from its previous close of 96.13 in late North American trade on Friday. The dollar scaled a high of 96.24 intraday and a low of 95.73.
The euro trended higher against the dollar at USD1.1183 on Tuesday, as compared to its previous close of USD1.1171 in North American trade late Friday. The euro scaled a high of USD1.1231 intraday and a low of USD1.1154 .
On the economic front, Chinese exports declined for the second straight month in August even after the devaluation of its currency and successive interest rate reductions. Imports also logged a double-digit decline, signaling some weak domestic demand.
China's exports fell 5.5% year-on-year in August following the prior month's 8.3% decrease. Economists had forecast a 6.6% drop. Imports slid 13.8% after easing 8.1% in July. Imports were expected to fall at a slower pace of 7.9%.
Consequently, China's trade balance showed a surplus of USD60.24 billion in August, well above the expected level of USD48 billion .
Eurozone economy grew more than initially estimated in the second quarter as strong exports offset a decline in investment. Gross domestic product advanced 0.4% sequentially after rising 0.5% a quarter ago, Eurostat reported Tuesday. The first quarter growth was the fastest since the same quarter of 2011, when the economy expanded 0.9%.
German exports expanded more-than-expected to a record high in July, led by a weak euro, suggesting that it would again be the major growth engine in the third quarter.
German exports rose 2.4% month-on-month in July, which was the fastest growth since December 2014 . Economists had forecast shipments to grow 1% reversing a 1.1% fall in June. Imports advanced by a faster-than-expected 2.2% in July after declining 0.8% in June. Imports were expected to grow 0.7%.
France's trade deficit in July widened more-than-expected from the previous month as both exports and imports moderated, figures from the French Customs showed Tuesday. The trade deficit increased to EUR 3.299 billion from EUR 2.757 billion in June, which was the smallest since July 2009 . Economists had forecast a shortfall of EUR 3.100 billion . A year ago, the deficit was EUR 5.557 billion .
The Organization for Economic Cooperation and Development on Tuesday said it expects growth to slow in China , the US and the UK Most developing economies are also indicated to slowdown including South Africa , Russia and Brazil in the second quarter. But the OECD's leading indicators show India will be an exception, with higher growth.
Source: RTTnews
