Gold Ends At 2-Month Low On Upbeat U.S. Data

(RTTNews) - Gold futures slipped for a fifth day to end at a two-month low on Wednesday, giving rise to fears of an early tightening of the monetary policy after a slew of upbeat economic data out of the U.S. with initial claims for unemployment benefits declining more than expected and existing home sales also rising beyond expectations.

Gold was under pressure after minutes of the Federal Reserve's most recent policy meeting hinted at fierce debate over when to raise U.S. interest rates. Some members preferred hike in rates sooner than forecast thanks to improvements in the job market and risks associated with ultra-easy monetary policy.

A batch of upbeat economic data from the U.S. earlier today showed existing home sales unexpectedly rose to a ten-month high in July, and a Labor Department report indicated jobless claims to have dropped more than expected in the week ended August 16.

Meanwhile, a Conference Board report showed a bigger than expected increase of its index of leading U.S. economic indicators in July, suggesting the economy is gaining traction.

As well, the closely watched regional manufacturing activity from the Federal Reserve Bank of Philadelphia unexpectedly grew at an accelerated rate in August, with index of activity in the sector reaching a three-year high.

Markets will also be paying close attention to top bankers at the Fed's annual Jackson Hole symposium on Friday, including the Fed Chair Janet Yellen and European Central Bank President Mario Draghi.

Gold for December delivery, the most actively traded contract, plunged $19.80 or 1.5 percent to close at $1,275.40 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for December delivery scaled an intraday high of $1,292.00 and a low of $1,273.40 an ounce.

On Wednesday, gold futures ended lower for a fourth day in a row, ahead of the minutes of the U.S. Federal Reserve's July policy meeting, with the dollar trending higher against a basket of select currencies.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved higher to 800.08 tons on Thursday, from its previous close of 799.19 tons on Wednesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.17 on Thursday, down from its previous close of 82.24 late Wednesday in North American trade. The dollar scaled a high of 82.36 intraday and a low of 82.10.

The euro ended higher against the dollar at $1.3279 on Thursday, as compared to its previous close of $1.3260 late Wednesday in North American trade. The euro scaled a high of $1.3290 intraday and a low of $1.3243.

In economic news, a report from the U.S. Labor Department showed initial jobless claims to have declined slightly more than expected to 298,000 in the week ended August 16, a drop of 14,000 from the previous week's revised level of 312,000. Economists expected jobless claims to pull back to 300,000 from the 311,000 originally reported for the previous week.

Data from National Association of Realtors showed existing home sales unexpectedly rose to their highest annual rate of the year in July, climbing to a seasonally adjusted 5.15 million, from a downwardly revised 5.03 million in June. Economists had expected existing home sales to drop to a rate of 5.00 million.

Meanwhile, Philadelphia Federal Reserve said its index of regional manufacturing activity unexpectedly reached a new three-year high in August, rising to 28.0, from 23.9 in July.

The Conference Board's leading economic index rose by a bigger than expected 0.9 percent in July, after seeing an increase of 0.6 percent in the preceding month.

In economic news from the eurozone, private sector growth eased more-than-expected in August, with the zone's composite output index falling to 52.8, from a score of 53.8 in July, data from Markit Economics showed. The indicator was expected to fall marginally to 53.4.

Elsewhere in Europe, U.K. retail sales volume grew 0.1 percent in July from a month ago, slower than the revised 0.2 percent increase in June, the Office for National Statistics reported Thursday. Economists had forecast sales to grow 0.4 percent. However, excluding auto fuel, retail sales advanced 0.5 percent, reversing the 0.1 percent fall in June. It was slightly faster than the expected growth of 0.4 percent.