Gold Ends Higher On Soft US Data; Sheds 0.6% For Week
Washington (Feb 13) Gold futures ended higher for a second straight session on Friday, as the dollar trended lower against some select currencies after some soft economic data from the US, following the disappointing US retail sales and unemployment claims data yesterday.
For the week, gold futures dropped about 0.6%.
In some soft economic news from the US, a University of Michigan report on Friday showed an unexpected, sharp pullback on its US consumer sentiment index in February, after having reported the index at an eleven-year high in the previous month.
Meanwhile, the Labor Department released a report on Friday showing another steep drop in US import prices in the month of January, attributed largely to falling energy prices.
Upbeat economic news from the eurozone and expectations of a rate hike from the Federal Reserve have weighed on gold prices all week. Helped by growth in Germany , the combined gross domestic product of the eurozone was up 0.3% sequentially in the fourth quarter.
Gold for April delivery, the most actively traded contract, gained USD6.40 or 0.5% to settle at USD1,227.10 an ounce on the Comex division of the New York Mercantile Exchange on Friday.
Gold for April delivery scaled an intraday high of USD1,234.90 and a low of USD1,222.50 an ounce.
On Thursday, gold ended at USD1,220.70 an ounce, up USD1.10 or 0.1%, on a weak dollar and some disappointing economic data from the US with retail sales dropping more than expected in January and first-time unemployment benefit claims rising more than anticipated last week.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, edged down to 771.51 tons on Friday, from its previous close of 773.31 tons.
The dollar index, which tracks the US unit against six major currencies, traded at 94.12 on Friday, down from its previous close of 94.19 late Thursday in North American trade. The dollar scaled a high of 94.31 intraday and a low of 93.90.
The euro trended lower against the dollar at USD1.1397 on Thursday, as compared to its previous close of USD1.1404 late Thursday in North American trade. The euro scaled a high of USD1.1446 intraday and a low of USD1.1381 .
On the economic front, a University of Michigan report on Friday unexpectedly showed a sharp pullback on its consumer sentiment index in February, after having reported US consumer sentiment at an eleven-year high in the previous month. The University of Michigan's preliminary consumer sentiment index for February tumbled to 93.6 from the final January reading of 98.1. Economists expected the index to edge up to a reading of 98.5.
The unexpected pullback by the index reflected deterioration in both consumers' assessment of current conditions as well as their expectations.
With fuel prices showing another substantial decrease, a US Labor Department report on Friday showed another steep drop in import prices in January. The report said US import prices plummeted by 2.8% in January after tumbling by a revised 1.9% in December. Economists expected prices to plunge by 3.0% compared to the 2.5% drop originally reported for the previous month.
Additionally, the Labor Department said export prices slumped by 2.0% in January following a revised 1.0% decrease in December. Export prices had been expected to fall by 0.8% compared to the 1.2% decline that had been reported for the previous month.
Eurozone economic growth picked up in the fourth quarter suggesting that lower oil prices and a weak euro boosted demand and in turn underpinned activity, flash estimates released by Eurostat showed Friday.
Nonetheless, the overall expansion in the 19-nation bloc was driven mainly by the power engine of the region, Germany . Meanwhile, other member nations exhibited diverging trends. Gross domestic product advanced 0.3% sequentially, faster than the 0.2% growth seen in the third quarter. The growth rate was expected to halt at 0.2%.
Germany's economic growth accelerated more-than-expected on domestic spending and exports in the fourth quarter, while investment dragged expansion in France .
German gross domestic product advanced 0.7% sequentially, much faster than a modest 0.1% rise in the prior quarter, data from Destatis revealed Friday. This was the fastest growth in three quarters and also exceeded a 0.3% rise forecast by economists.
The French economic growth slowed as expected in the fourth quarter, the statistical office Insee reported Friday. France's gross domestic product rose 0.1% sequentially, in line with forecast, but slower than third quarter's 0.3% expansion.
Elsewhere in Asia , a leading indicator of economic activity in China rose at a slower pace in January, a survey by the Conference Board showed Friday. The Conference Board's leading economic indicators index for China increased 0.9% month-on-month in January following the 1.1% rise in December.
Source: CNBCNews
