Gold Ends Lower Ahead Of Fed Meet Outcome

(RTTNews) - Gold futures snapped a six-day gain to end lower on Tuesday, after concerns over the volatile situation in Iraq somewhat eased with government forces able to push back militants to a certain extent. Investors also remained cautious ahead of the two-day U.S. Federal Reserve policy meet that began today, with continued focus on Iraq and Ukraine.

With the ongoing Fed Reserve meet, some disappointing data from the U.S. related to inflation, also pegged back gold prices which showed consumer prices to have risen in May, taking the annual inflation rate to its highest since late 2012.

Gold for August delivery, the most actively traded contract, slipped $3.30 or 0.3 percent to close at $1,272.00 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for August delivery scaled an intraday high of $1,273.50 and a low of $1,258.00 an ounce.

On Monday, gold futures ended slightly higher for a sixth successive session, on concerns over the mounting violence in Iraq, prompting investors to seek the safe haven appeal of the yellow metal.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, slipped lower to 782.88 tons on Tuesday, from its previous close of 787.08 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.59 on Tuesday, up from its previous close of 80.44 late Monday in North American trade. The dollar scaled a high of 80.66 intraday and a low of 80.40.

The euro traded lower against the dollar at $1.3545 on Tuesday, as compared to its previous close of $1.3573 late Tuesday in North American trade. The euro scaled a high of $1.3587 intraday and a low of $1.3536.

In economic news from the U.S., data from the Commerce Department showed housing starts to have declined 6.5 percent to an annual rate of 1.001 million in May, after jumping 12.7 percent to a rate of 1.071 million in April. Economists expected housing starts to drop to a rate of 1.030 million.

Meanwhile, building permits dropped 6.4 percent to an annual rate of 991,000 in May from the downwardly revised April rate of 1.059 million.

A report from the Labor Department showed consumer prices in U.S. to have risen by a more than expected 0.4 percent in May, up from 0.3 percent in April. Economists expected the index to edge up by about 0.2 percent. Higher prices for food, shelter, electricity, airline fares, and gasoline all contributed to the bigger than expected increase of the index.

In economic news from the eurozone, labor cost grew at a slower annual pace in the first three months of the year, rising 0.9 percent year-on-year, following a 1.6 percent gain in the fourth quarter last fiscal.

Meanwhile, U.K. inflation eased to a 55-month low of 1.5 percent in May, following a fall in transport and food costs. U.K. house price inflation accelerated in April, rising 9.9 percent annually, compared to an 8 percent rise in March.