Gold Ends Flat On Global Cues

(RTTNews) - Gold futures ended a tad higher for a fourth straight session on Wednesday, after some disappointing retail sales data from the U.S., even as investors dug into the safety of the precious metal with most global equity markets in the red.

Gold found support with the dollar weakening against a basket of some select currencies, following the downbeat economic data from the U.S.

Nonetheless, in early trading, gold leveled off with the dollar at a new 9-year peak near $1.18 versus the euro, amid expectations the Federal Reserve will hike interest rates in the first half of 2015.

In some disappointing economic news, U.S. retail sales fell much more than anticipated in December, partly reflecting the recent drop in gasoline prices, a Commerce Department report showed Wednesday. Meanwhile, a separate report from the Labor Department showed falling fuel prices contributed to another substantial decrease in U.S. import prices for December.

The Federal Reserve is scheduled to release its Beige Book Report at 2 pm ET. The report is expected to show anecdotal evidence that the U.S. recovery is gathering steam.

Meanwhile noted investor Marc Faber said Tuesday he expects gold prices to rise by 30 percent in 2015.

"My belief is that the big surprise this year is that investor confidence in central banks collapses. And when that happens - I can't short central banks, although I'd really like to, and the only way to short them is to go long gold, silver and platinum," he said.

Gold for February delivery, the most actively traded contract, inched up $0.10 to settle at $1,234.50 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for February delivery scaled an intraday high of $1,244.60 and a low of $1,224.90 an ounce.

On Tuesday, gold prices ended at $1,234.40 an ounce, up $1.60 or 0.1 percent, with investors seeking the safety of precious metal as U.S. equity markets continued to fluctuate on plummeting oil prices.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 707.82 tons from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 92.08 on Wednesday, down from its previous close of 92.22 late Tuesday in North American trade. The dollar scaled a high of 92.42 intraday and a low of 91.61.

The euro trended lower higher the dollar at $1.1784 on Wednesday, as compared to its previous close of $1.1772 late Tuesday in North American trade. The euro scaled a high of $1.1847 intraday and a low of $1.1730.

On the economic front, a much weaker than expected report on U.S. retail sales has also had a negative impact on investor sentiment, with retail sales down 0.9 percent in December after climbing by a downwardly revised 0.4 percent in November. Economists expected sales to edge down by 0.1 percent.

A separate report from the Labor Department showed that falling fuel prices contributed to another substantial decrease in U.S. import prices in December, with import price index plummeting 2.5 percent after tumbling by a revised 1.8 percent in November. Economists expected import prices to slump by 2.7 percent.

Additionally, the report said export prices fell 1.2 percent in December following a 0.8 percent drop in the previous month. Export prices had been expected to fall by 0.5 percent.

Meanwhile, U.S. business inventories rose slightly less than expected in November, with an increase in wholesale inventories partly offset by a drop in retail inventories, the Commerce Department said. The report showed business inventories up by 0.2 percent in November, matching the modest increase seen in October. Economists expected inventories to rise by about 0.3 percent.

From Europe, the leading economic index for the UK, which measures the future economic activity, dropped for the third straight month in November, data from the Conference Board showed Wednesday. The Conference Board's leading economic index fell 0.3 percent in November, same as in both September and October. In the May to November period, the leading index improved 0.3 percent, down from 2.2 percent growth in the previous six-month period.

The World Bank downgraded its global economic forecast citing weak prospects for the euro area and Japan, despite an uptick in developing countries and strong momentum in the United States.

In its biannual report 'Global Economic Prospects' released on Tuesday, the World Bank said global gross domestic product is expected to grow 3 percent in 2015, slower than the 3.4 percent estimated in June. For 2016, the economy is projected to expand 3.3 percent instead of 3.5 percent. The bank predicted 3.2 percent growth for 2017.