Gold Ends A Shade Lower On Strong Dollar, Inflation Data

(RTTNews) - Gold futures ended a tad lower on Thursday, as the dollar trended higher against a basket of major currencies with U.S. consumer inflation rising strongly, even as investors mulled over the Federal Reserve's minutes of its April meeting related to interest rate hikes.

For the week, gold futures dropped about 1.7 percent, after two straight weeks of gain.

Consumer prices in the U.S. rose in line with economist estimates in April, although it also showed a bigger than expected increase in core prices, a report from the Labor Department showed Friday. A tame inflation report could have cemented expectations the Federal Reserve would keep interest rates at zero all summer.

Some analysts now believe the stats could have the Federal Reserve on track to hike interest rates later this year.

Gold for June delivery, the most actively traded contract, shed $0.10 to settle at $1,204.00 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.

Gold for June delivery scaled an intraday high of $1,214.60 and a low of $1,201.00 an ounce.

On Thursday, gold futures ended lower at $1,204.10, down $4.60 or 0.4 percent, with investors continuing to mull over the Federal Reserve's minutes for its April meeting, amid a slew of disappointing economic data from the U.S. and Europe.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 715.26 tons on Friday from its previous close of 718.24 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.18 on Friday, up from its previous close of 95.40 on Thursday in late North American trade. The dollar scaled a high of 96.22 intraday and a low of 94.82.

The euro trended lower against the dollar at $1.1020 on Friday, as compared to its previous close of $1.1113 in North American trade late Thursday. The euro scaled a high of $1.1207 intraday and a low of $1.1003.

On the economic front, consumer prices in the U.S. rose in line with economist estimates in April, although the report also showed a bigger than expected increase in core prices, a report from the Labor Department showed Friday. The Labor Department said its consumer price index inched up by 0.1 percent in April after rising by 0.2 percent in each of the two previous months. The modest increase was in line with economists' estimates.

German business confidence weakened marginally from a 10-month high in May and the economy grew at a slower pace in the first quarter, as initially estimated, revealed two separate reports released Friday.

The business confidence index fell less-than-expected to 108.5 in May from 108.6 in April, according to a survey by Munich-based Ifo Institute. This was the first fall in seven months but the index came in above the economists' estimate of 108.3.

Germany's economic growth eased as estimated in the first quarter largely due to the weakness in foreign trade, final data from Destatis showed Friday. Gross domestic product grew 0.3 percent sequentially in the first quarter, slower than the 0.7 percent expansion seen in the fourth quarter.

The total value of new orders received by the German construction industry declined in March, figures from Destatis showed Friday. Orders in the construction sector fell a seasonally and working-day-adjusted 2.2 percent month-over-month in March.

French consumer confidence improved unexpectedly in May to the strongest level since August 2011, survey data from the statistical office Insee showed Friday. The manufacturing confidence index rose slightly to 103 in May from 102 in the previous month, which was revised from a reading of 101. Economists had expected the index to remain stable at 101.

The U.K. budget deficit narrowed in April from last year, data published by the Office for National Statistics showed Friday. Public sector net borrowing excluding banks declined by GBP 2.5 billion to GBP 6.8 billion in April.

British households perceive that the value of their home increased in May, a survey from Knight Frank and Markit Economics showed Friday. The house price sentiment index, or HPSI, fell slightly to 58.0 in May from 58.2 in the previous month. However, a reading above 50 indicates a rise in house prices. This marked the twenty-sixth successive month of the index remaining above 50.