Gold Ends Lower, Still Below $1,300
San Francisco (Aug 19) Gold futures ended lower for a third straight session Tuesday, as investors sought riskier assets while tracking rising global equity markets on some positive economic data from the U.S. The dollar continued to trend higher with reports of a rebound in U.S. housing starts for July and U.S. consumer prices registering a modest increase.
Investors also remained cautious ahead of the minutes from U.S. Federal Reserve's July monetary policy meeting, due Wednesday.
In some positive economic news from the U.S., a Commerce Department report on Tuesday showed a substantial rebound in housing starts in July, after having reported a notable decrease in new residential construction for the previous month.
Meanwhile, a Labor Department report showed consumer prices in the U.S. saw only a modest increase in July, with higher prices for shelter and food offset by decreases in prices for energy and airline fares.
Gold for December delivery, the most actively traded contract, shed $2.60 or 0.2 percent to close at $1,296.70 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
Gold for December delivery scaled an intraday high of $1,303.70 and a low of $1,294.70 an ounce.
On Monday, gold futures lower as investors sought riskier assets, tracking strong global equity markets. The dollar's rise against some major currencies on the back of an upbeat U.S. homebuilder confidence data too contributed to the yellow metal's decline.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved up to 797.69 tons on Tuesday, from its previous close of 795.60 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.88 on Tuesday, up from its previous close of 81.57 late Monday in North American trade. The dollar scaled a high of 81.89 intraday and a low of 81.59.
The euro ended lower against the dollar at $1.3319 on Tuesday, as compared to its previous close of $1.3364 late Monday in North American trade. The euro scaled a high of $1.3365 intraday and a low of $1.3314.
In economic news from the U.S., a report from the U.S. Labor Department showed consumer prices to have risen at a slower pace in July. The consumer price index was up by a seasonally adjusted 0.1 percent in the month, in line with expectations. Core CPI, which excludes volatile food and energy costs, also increased 0.1 percent, against forecasts for a 0.2 percent rise.
Meanwhile, data from the Commerce Department showed U.S. housing starts to have rebounded substantially in July, jumping 15.7 percent to an annual rate of 1.093 million, after falling 4 percent to a revised 945,000 in June. Economists expected housing starts to climb to a rate of 963,000 from the 893,000 originally reported for the previous month.
The U.S. Commerce Department also reported building permits, an indicator of future housing demand, to have shot up 8.1 percent to an annual rate of 1.052 million in July from the revised June rate of 973,000. Economists anticipated building permits to rise 2.5% to 1.0 million units.
From Europe, house prices in the United Kingdom rose at a slightly slower pace in June compared to May, but the pace of increase remained solid, figures from the Office for National Statistics showed Tuesday. The house price index climbed 10.2 percent year-on-year following 10.4 percent rise in May. Economists had forecast 10.2 percent gain for June.
Inflation in the U.K. eased to 1.6 percent in July from 1.9 percent in June, the Office for National Statistics reported Tuesday. Economists expected inflation at 1.8 percent. It has been below the 2 percent target since last January. Month-on-month, consumer prices fell 0.3 percent, offsetting the 0.2 percent increase in June. Economists projected a 0.2 percent drop for July.