Gold Ends Higher As Equity Markets Decline

(RTTNews) - Gold futures ended higher for a third straight session on Tuesday, with investors seeking the safety of the precious metal as U.S. equity markets continued to fluctuate on plummeting oil prices.

Gold prices reached 3-month highs Tuesday morning before surrendering most of the gains, after the dollar strengthened against major rivals.

Bullion prices have jumped this week amid renewed expectations that stagnant U.S. wages will dissuade the Federal Reserve from raising interest rates in the first half of the year.

However, Atlanta Fed President Dennis Lockhart said Federal Reserve is on track to raise interest rates by the middle of the year. The U.S. economy is now "hitting on all cylinders," Lockhart told the Rotary Club of Atlanta Monday morning. "The recovery that began in 2009 is well-advanced."

Meanwhile, political upheaval in Greece could prove chaotic for the eurozone, boosting the precious metal's safe haven appeal.

Gold for February delivery, the most actively traded contract, moved up $1.60 or 0.1 percent to settle at $1,234.40 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for February delivery scaled an intraday high of $1,244.50 and a low of $1,230.70 an ounce. It was the highest since October 23.

On Monday, gold prices ended at $1,232.80 an ounce, up $16.70 or 1.4 percent, with investors seeking its safe haven as global equity markets declined on the continued plunge in 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 92.26 on Tuesday, up from its previous close of 92.08 late Monday in North American trade. The dollar scaled a high of 92.43 intraday and a low of 91.81.

The euro trended lower against the dollar at $1.1767 on Tuesday, as compared to its previous close of $1.1835 late Monday in North American trade. The euro scaled a high of $1.1861 intraday and a low of $1.1756.

In economic news, China's trade surplus decreased slightly less than expected in December as exports rose more than forecast while imports continued to fall, although at a slower than expected rate, data from the customs office showed on Tuesday.

China's trade surplus dropped to $49.6 billion in December from November's record high of $54.48 billion. Economists expected the trade surplus to decrease to $49 billion.

Germany's wholesale price decline accelerated for a second straight month in December with prices falling the most in five years during the whole year 2014, preliminary figures from Destatis showed Tuesday. The wholesale price index fell 2.3 percent year-on-year in December, faster than November's 1.1 percent decline. In October, prices dropped 0.7 percent.

Elsewhere in Europe, U.K. inflation slowed more-than-expected to its lowest since May 2000 on lower fuel prices, data from the Office for National Statistics showed Tuesday. Inflation halved to 0.5 percent in December from 1 percent in November. It was expected to ease to 0.7 percent.

Another report from ONS today showed that output prices in U.K. declined at a faster pace of 0.8 percent annually in December after falling 0.6 percent in November. It was faster than the 0.4 percent drop forecast by economists.