Gold Price Ends Lower Amid Speculation On Fed Rate Hike
New York (Sept 29) Gold futures ended lower for a third straight session on Tuesday, amid speculations over a Fed rate hike this year, even as concerns over the slowdown in the Chinese economy strengthened.
Global stock markets were also on the wane, with most European and Asian markets closing deep in the red, although U.S. markets were modestly higher approaching the close.
Traders will be paying close attention to each economic release in the coming weeks, for cues as to when the Federal Reserve will raise interest rates. Apprehension over a slowdown in Chinese economy continued to strengthen with yesterday's sell-off in commodities, since China is one of the major importers of metals in the world.
In some soft economic news, home prices in major U.S. metropolitan unexpectedly decreased in July, a report from Standard & Poor's showed Tuesday. However, a Conference Board report on Tuesday showed an unexpected improvement in U.S. consumer confidence in September, reflecting a more positive assessment of current conditions.
Gold for December delivery, the most actively traded contract, dropped $4.90 or 0.4 percent, to settle at $1,126.80 an ounce, on the Comex division of the New York Mercantile Exchange Tuesday.
Gold for December delivery scaled an intraday high of $1,133.40 and a low of $1,123.50 an ounce.
On Monday, gold prices for December delivery dropped $13.90 or 1.2 percent, to settle at $1,131.70 an ounce, as investors tracked some sharply declining global equity markets on worries of global economic slowdown with further soft data from China strengthening the stand.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 684.14 tons on Tuesday from its previous close.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.94 on Tuesday, down from its previous close of 96.01 in late North American trade on Monday. The dollar scaled a high of 96.24 intraday and a low of 95.71.
The euro trended higher against the dollar at 1.1246 on Tuesday, as compared to its previous close of 1.1244 in North American trade late Monday. The euro scaled a high of 1.1282 intraday and a low of 1.1190.
On the economic front, home prices in major U.S. metropolitan unexpectedly decreased in July, a report from Standard & Poor's showed Tuesday. The S&P/Case-Shiller 20-City Composite Home Price Index edged down by a seasonally adjusted 0.2 percent in July, matching the revised drop seen in June. Economists expected the index to edge up by 0.1 percent during the month.
Reflecting a more positive assessment of current conditions, a Conference Board report on Tuesday showed an unexpected improvement in U.S. consumer confidence in September. The Board's consumer confidence index climbed to 103.0 in September from 101.3 in August. Economists expected the index to pull back to 96.0.
Elsewhere, eurozone economic confidence improved notably to a 4-year high in September notwithstanding concerns about China woes and slow global growth, survey data from the European Commission showed Tuesday. The economic sentiment index rose to 105.6 in September, the highest since June 2011, from a revised 104.1 in August. It was forecast to drop marginally to 104.1 from August's originally estimated reading of 104.2.
Germany's consumer prices remained unchanged in September, defying expectations for a modest increase, while the EU measure of inflation tumbled more-than-expected, preliminary data from the statistical office Destatis showed Tuesday.
The consumer price index held steady annually in September, following a 0.2 percent increase in both July and August. Economists had expected a 0.1 percent gain.
The harmonized index of consumer prices, or HICP, meant for EU purposes fell 0.2 percent year-on-year, which was also bigger than the 0.1 percent decline economists had expected. The HICP decreased 0.3 percent from the previous month, when it was unchanged. Economists were looking for a 0.1 percent fall.
Germany's import prices declined at a slightly faster-than-expected pace in August, figures from Destatis showed Tuesday. The import price index fell 3.1 percent year-over-year in August, faster than the 1.7 percent decrease in the previous month. Economists had expected a 3.0 percent drop for the month.
Meanwhile, Germany's export prices declined at a slower pace of 0.8 percent yearly in August, following a 1.2 percent climb in the preceding month. The index has been rising since September last year.
U.K. high street sales and orders logged stronger-than-expected growth in September, the latest Distributive Trades Survey from the Confederation of British Industry showed Tuesday. The retail sales balance rose to +49 percent from +24 percent in August. It was above the expected level of +28 percent.
U.K. mortgage approvals increased to a 19-month high in August, the Bank of England reported Tuesday. The number of mortgage approvals increased to 71,030 from 69,010 in July. This was the highest since January 2014, when it totaled 75,611. It was also above the expected level of 69,800.