Gold Ends Higher For A Fifth Straight Session
New York (Mar 24) Gold futures moved up a fifth straight session to end at a near three-week high on Tuesday, with investors opting for the safe haven appeal of the precious metal as equity markets in the U.S. ticked lower amid continued worries over Greece's financial woes. Nevertheless, the gains were limited as the dollar continued to trend higher against a basket of some major currencies.
Some upbeat economic news also pegged down the gains made by gold, with consumer prices in the U.S. rising in line with economist estimates in February, partly reflecting a rebound in energy prices. Meanwhile, new home sales in the U.S. also increased unexpectedly in February, the highest level in seven years.
Greek Prime Minister Alexis Tsipras and German Chancellor Angela Merkel met in Berlin with hopes to stave off another financial crisis, but still no clarity emerged as to how the beleaguered country will generate funds. Germany has been very adamant and critical of Greece's financial reforms. Greece has been trying hard to renegotiate the terms of its international bailout.
Gold for April delivery, the most actively traded contract, gained $3.70 or 0.3 percent to settle at $1,191.40 an ounce, on the Comex division of the New York Mercantile Exchange on Tuesday.
Gold for April delivery scaled an intraday high of $1,194.50 and a low of $1,184.70 an ounce.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, ticked lower at 744.40 tons from its previous close of 749.77 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.12 on Tuesday, down from its previous close of 96.96 on Monday in late North American trade. The dollar scaled a high of 97.38 intraday and a low of 96.39.
The euro trended lower against the dollar at $1.0920 on Tuesday, as compared to its previous close of $1.0946 in North American trade late Monday. The euro scaled a high of $1.1030 intraday and a low of $1.0892.
In economic news, consumer prices in the U.S. rose in line with economist estimates in February, with the increase partly reflecting a rebound in energy prices, a report from the Labor Department showed Tuesday. The consumer price index edged up by 0.2 percent in February after tumbling 0.7 percent in January. This was in line with the consensus estimate.
New home sales in the U.S. unexpectedly increased in the month of February with sales jumping to their highest level in seven years, a Commerce Department report revealed Tuesday. New home sales surged 7.8 percent to an annual rate of 539,000 in February from the revised January rate of 500,000. Economists expected new home sales to drop to a rate of 462,000 from the 481,000 originally reported for the previous month.
Meanwhile, St. Louis Federal Reserve President James Bullard told a London panel this morning that "Zero is no longer the appropriate interest rate for the U.S. economy."
Elsewhere, the manufacturing sector in China contracted in March, a survey from HSBC Bank showed on Tuesday, with a PMI score of 49.2. That was well shy of a forecast for 50.5, and down sharply from 50.7 in February.
China's economic growth could ease further in the first quarter of this year from a five-year low logged in the final three months of 2014, a top government think-tank predicted this week. Gross domestic product growth could ease to 6.85 percent in the first quarter of the year from 7.3 percent in the fourth quarter of 2014, the Chinese Academy of Social Sciences said.
Earlier this month, the State Information Centre predicted that China's economic growth is set to slow to 7 percent in the first quarter of this year.
Eurozone private sector grew at the fastest pace in almost four years in March as the expansion in the largest member country hit an eight-month high, signs the quantitative easing of the ECB has started to take effect.
Eurozone's flash composite Purchasing Managers' Index rose to 54.1 in March from 53.3 in February, data from Markit Economics revealed Tuesday. The index rose for the fourth consecutive month to reach the highest since May 2011. The reading stayed above the forecast of 53.6.
Germany's private sector expanded at the strongest pace in eight months in March, flash data from Markit Economics showed Tuesday. The composite Purchasing Managers' Index rose to 55.3 from 53.8 in February. The growth has stretched to 23 months and the latest rate of expansion was the most marked since July last year.
The French private sector expanded for the second month but the pace of growth eased in March, flash survey data published by Markit Economics showed Tuesday. The flash composite output index fell to 51.7 in March from 52.2 in February.
U.K. inflation fell to zero for the first time on record in February on sharp declines in fuel and food prices and factory-gate prices continued its negative trend. Consumer prices remained flat in February from last year after rising 0.3 percent in January, the Office for National Statistics said Tuesday. It was the first time that inflation was zero since comparable records began in 1989. Prices were expected to rise 0.1 percent.
House price inflation in the United Kingdom eased more-than-expected in January to its lowest level in ten months, figures from the Office for National Statistics showed Tuesday. The house price index rose 8.4 percent year-over-year in January, following a 9.8 percent increase in December. Economists had expected prices to increase by 8.9 percent.