Gold Ends Lower On Gaza, U.S. Data

Chicago (July 22)  Gold futures ended lower on Tuesday, tracking strong global equity markets as investor opted for riskier assets, amid escalating tensions in Gaza. Some upbeat economic data from the U.S. showed existing home sales rising even as inflation increased, with speculations the Fed rate hike may come anytime soon.

Nonetheless, the downside is limited due to persisting concerns over the situation in Gaza. Despite attempts to work out a cease-fire, the Israeli forces are reportedly engaged in some intense battle with Hamas.

Meanwhile, pro-Russian rebels in eastern Ukraine handed over the flight recorder boxes of the Malaysian Airlines passenger jet that was shot down earlier last week.

Gold for August delivery, the most actively traded contract, shed $7.60 or 0.6 percent to close at $1,306.30 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for August delivery scaled an intraday high of $1,316.80 and a low of $1,302.20 an ounce.

On Monday, gold prices made moderate gains with the conflict between Israeli military and Hamas continued to rage, with casualties mounting on both sides.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 803.34 on Tuesday from its previous close of 805.14 tons on Monday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.77 on Tuesday, up from its previous close of 80.56 late Monday in North American trade. The dollar scaled a high of 80.84 intraday and a low of 80.54.

The euro traded lower against the dollar at $1.3467 on Tuesday, as compared to its previous close of $1.3524 late Monday in North American trade. The euro scaled a high of $1.3529 intraday and a low of $1.3460.

In economic news from the U.S., the inflation report from the Labor Department said consumer prices rose a seasonally adjusted 0.3 percent in June on higher gasoline prices, after rising 0.4 percent in May in line with forecasts.

Excluding food and energy prices, core consumer prices inched up by 0.1 percent in June after rising by 0.3 percent in the previous month. Economists had expected core prices to edge up by 0.2 percent.

With the rise in inflation due largely to volatile gas prices, it now remains to be seen as to whether the Federal Reserve would take a decision to hike interest rates anytime sooner than forecast.

The National Association of Realtors in its report on Tuesday showed existing home sales in the U.S. to have increased more than expected in June. NAR said existing home sales climbed 2.6 percent to a seasonally adjusted annual rate of 5.04 million in June after jumping 5.4 percent to an upwardly revised 4.91 million in May. Economists expected sales to rise to 4.99 million from the 4.89 million originally reported for the previous month.

British manufacturing firms were upbeat on the next quarter with expectations for total orders growth at their strongest since 1977. A survey from the Confederation of British Industry on Tuesday showed a balance of 33 percent expects new orders to increase in the next quarter. During three months to July, the order balance came in at 24 percent, which was the highest since April 1995.

Germany's leading economic index rose 0.3 percent in May, following a 0.2 percent increase in April and stagnation in March, the Conference Board said Tuesday. The leading index for Germany has been trending upward since the end of 2012.

Source: rttNews