Gold Ends Lower On Upbeat Data, Ahead Of ECB Rate Decision

(RTTNews) - Gold futures ended lower for a second straight session Tuesday, after the dollar trended higher against a select band of currencies on some upbeat economic data from the U.S. with factory orders for June and non-manufacturing index for July improving more than expected.

On Thursday, the European Central Bank will come out with its monetary policy. It is expected that interest rate will be held at 0.15 percent, but traders will be looking for any indication that further stimulus is forthcoming.

Officials in Europe are grappling with anemic inflation and sluggish economic growth, even as the recovery in the U.S. appears to be picking up steam.

Gold for December delivery, the most actively traded contract, dropped $3.70 or 0.3 percent to close at $1,284.00 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for December delivery scaled an intraday high of $1,294.30 and a low of $1,283.30 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged lower to 800.05 on from its previous close on Tuesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.57 on Tuesday, up from its previous close of 81.32 late Tuesday in North American trade. The dollar scaled a high of 81.63 intraday and a low of 81.29.

The euro traded lower against the dollar at $1.3365 on Tuesday, as compared to its previous close of $1.3422 late Monday in North American trade. The euro scaled a high of $1.3425 intraday and a low of $1.3410.

In economic news, data from the Commerce Department showed U.S. factory orders to have jumped by a more than expected 1.1 percent in June, following a revised 0.6 percent decrease in May. Economists expected orders to increase by about 0.6 percent compared to the 0.5 percent drop originally reported for the previous month.

A report from the Institute of Supply Management showed activity in the U.S. service sector expanded at a notably faster rate in July, with the non-manufacturing index climbing to 58.7, the highest reading since its inception in January 2008. Economists expected the index to edge up to a reading of 56.5.

From Europe, U.K. services activity growth strengthened to an eight-month high in July indicating that the dominant sector is set to boost economic growth again in the third quarter and raises possibilities that the Bank of England will bring forward its first interest rate hike into late 2014. The headline Chartered Institute of Purchasing & Supply/Markit Purchasing Managers' Index rose to 59.1 in July, an eight-month high, from 57.7 in June, survey data revealed Tuesday.