Gold Ends Lower On Rate Hike Speculation

(RTTNews) - Gold futures slipped for a fifth straight session to end lower on Tuesday, amid growing speculation about U.S. interest rate hikes and subdued physical demand for the precious metal, notwithstanding a weak dollar. The precious metal pegged back some of the losses with declining global equity markets and some soft economic data out of Europe and the U.S.

The European Commission lowered its euro area growth forecasts, citing weak economy and slow improvement in the employment situation. The European Commission also reduced its inflation projection for 2015 and the current year.

Meanwhile, U.S. trade deficit widened much more than anticipated in September, reflecting a notable pullback in the value of exports, a Commerce Department report showed Tuesday.

As well, new orders for U.S. manufactured goods dropped in line with economist estimates in September, largely due to a sharp drop in orders for transportation equipment.

Gold for December delivery, the most actively traded contract, shed $2.1 or 0.2 percent to settle at $1,167.70 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for December delivery scaled an intraday high of $1,175.00 and a low of $1,163.40 an ounce.

On Monday, gold futures ended down, extending losses to a fourth straight session. The yellow metal lost its sheen as the dollar zoomed to 4-year highs on signs the Federal Reserve will start hiking rates sooner than earlier anticipated in response to upbeat economic data.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 741.21 tons on Tuesday from its previous close of 742.40 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 87.00 on Tuesday, down from its previous close of 87.29 late Tuesday in North American trade. The dollar scaled a high of 87.30 intraday and a low of 86.88.

The euro trended higher against the dollar at $1.2553 on Monday, as compared to its previous close of $1.2482 late Monday in North American trade. The euro scaled a high of $1.2576 intraday and a low of $1.2482.

In economic news from the U.S., a report from the Commerce Department showed trade deficit to have widened much more than anticipated to $43.0 billion in September, from a revised $40.0 billion in August. While value of imports was nearly unchanged, the value of exports fell 1.5 percent.

According to another report from the Commerce Department, new orders for U.S. manufactured goods dropped 0.6 percent in September, after tumbling 10.0 percent in August. The continued decrease in orders matched the consensus estimate.

Meanwhile, citing weak economy and slow improvement in the employment situation, the European Commission on Tuesday lowered the euro area growth forecast for 2015 to 1.1 percent from 1.7 percent predicted in May. The outlook for this year has been cut to 0.8 percent from 1.2 percent.

European Commission reduced inflation projection for 2015 to 0.8 percent from 1.2 percent, and for the current year it has been trimmed to 0.5 percent from 0.8 percent earlier.

Eurozone producer prices rose for the first time in three months in September, Eurostat reported Tuesday. Producer prices gained 0.2 percent in September from August, when prices fell by 0.2 percent. Economists had forecast prices to remain flat in September.

Elsewhere in Europe, U.K. construction sector growth slowed more than expected in October, a survey from Markit Economics and CIPS showed Tuesday. The seasonally adjusted Markit/CIPS construction purchasing managers' index fell to 61.4 in October from 64.2 in September. This was less than the 63.5 expected by economists.