Gold Price Ends Higher On Weak Dollar, Ahead Of Fed Outcome
Washington (Apr 28) Gold futures extended gains for a second straight session to end at a three-week high on Tuesday, as the dollar continued to weaken against a select band of currencies and ahead of the US Federal Reserve's two-day monetary policy meet, with investors focused on the Fed providing some clarity to the imminent interest rate hike.
Meanwhile, there was little progress as Greece continued its talks with creditors to resolve outstanding differences for urgently unlocking the financial aid, without which the beleaguered nation could go bankrupt. The fallout of such a scenario could be catastrophic for world markets.
The Fed's two-day meeting on monetary policy began today in Washington , with an announcement scheduled for Wednesday afternoon. Although few anticipate a rate hike at this meeting, traders are hoping for some clarity about whether the Fed targets July or September to begin tightening.
Nonetheless, the gains made by the precious metal were somewhat limited on some mixed economic data from the US with growth in home prices in major US metropolitan areas accelerating more than expected in February, while a Conference Board report showed US consumer confidence index to have unexpectedly pulled back sharply in April.
Gold for June delivery, the most actively traded contract, gained USD10.70 or 0.9% to settle at USD1,213.90 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.
Gold for June delivery scaled an intraday high of USD1,214.90 and a low of USD1,198.60 an ounce.
On Monday, gold futures surged USD28.20 or 2.4% to settle at USD1,203.20 an ounce, on continued uncertainty over Greece's financial woes and investors awaiting hints from the US Federal Reserve's monetary policy meet later this week on its interest rate hike plans.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, edged lower 739.06 tons from its previous close of 742.35 tons.
The dollar index, which tracks the US unit against six major currencies, traded at 96.14 on Tuesday, down from its previous close of 96.86 on Monday in late North American trade. The dollar scaled a high of 96.93 intraday and a low of 96.01.
The euro trended higher against the dollar at USD1.0981 on Tuesday, as compared to its previous close of USD1.0890 in North American trade late Monday. The euro scaled a high of USD1.0991 intraday and a low of USD1.0863 .
In economic news, annual growth in home prices in major US metropolitan areas accelerated more than expected in February, a report from Standard & Poor's showed Tuesday. The S&P/Case-Shiller 20-City Composite Home Price Index jumped 5.0% year-over-year in February compared to a downwardly revised 4.5% increase in January. Economists expected the growth to accelerate to 4.7% from the 4.6% originally reported for the previous month.
A Conference Board report on Tuesday showed its US consumer confidence index unexpectedly pulled back sharply in April, after reporting a significant rebound in the previous month. The US consumer confidence index tumbled to 95.2 in April from an upwardly revised 101.4 in March. Economists expected the index to climb to a reading of 102.5.
The British economy expanded at the slowest pace since 2012, reflecting contraction in construction and industrial activity, preliminary estimate published by the Office for National Statistics revealed Tuesday. Gross domestic product expanded 0.3% sequentially during the January to March period, the slowest growth since the fourth quarter of 2012. It was forecast to slow marginally to 0.5% from the 0.6% logged in the fourth quarter of 2014.
Loans approved for house purchase in the UK rose to the highest level in six months during March, data from the British Bankers' Association showed Tuesday. The number of loans approved for house purchase climbed to 38,751 from 37,453 in March. Economists had expected an increase in the figure to 38,700.
French consumer confidence strengthened to its highest level since January 2010 , survey data from the statistical office Insee revealed Tuesday. The consumer confidence index rose to 94 in April, the highest level since January 2010 , from 93 in March. The reading was in line with expectations.
French unemployment rose to a record high in March, data released by the labor ministry revealed Monday. The number of unemployed increased 15,400 or 0.4% from February to 3.51 million in March.
The total value of retail sales in Japan tumbled 9.7% on year in March, the Ministry of Economy, Trade and Industry said on Tuesday - coming in at 12.396 trillion yen . That missed forecast for a decline of 7.5% following the 1.7% contraction in February.
Source: AllianceNews
