Gold Ends Lower On Upbeat Data, Strong Dollar

(RTTNews) - Gold futures ended lower on Friday, as the dollar strengthened after some upbeat economic data from the U.S. showed consumer sentiment in August to have improved unexpectedly, although consumer spending in July dipped.

Nonetheless, the decline was limited on concerns over the situation in Ukraine with investors closely monitoring the ongoing geopolitical tensions between Ukraine and Russia.

Meanwhile, NATO accused Russia of violating Ukraine's sovereignty and providing military support to pro-Russian rebels. NATO Secretary-General Anders Fogh Rasmussen indicated it was clear Russia had sent its troops into Ukraine.

News reports quoted Ukraine Prime Minister Arseny Yatsenyuk as saying that he would push for his country's membership of NATO and would send a bill to the parliament.

U.S. President Barack Obama blamed Russia for the violence in eastern Ukraine, stating that it was the result of deep Russian involvement and that satellite images supported the claim of involvement. However, Russia continues to deny having any of its troops on Ukrainian territory.

On the economic front, a Thomson Reuters and University of Michigan report on Friday showed consumer sentiment in the U.S. to have unexpectedly improved in August, in an upward revision from a preliminary reading.

However, in a surprise retreat that complicates the prevailing belief that the U.S. economic situation is improving, consumers spent less in July than in the previous month, statistics issued by the U.S. Commerce Department showed. Personal income rose for the month, though at a slower pace than economists had projected.

Manufacturing activity in the Chicago-area also rebounded in August, as factories reported increases in new orders.

Gold for December delivery, the most actively traded contract, dropped $3.00 or 0.2 percent to close at $1,287.40 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,292.50 and a low of $1,284.10 an ounce.

On Thursday, gold futures ended higher on its safe haven appeal with investors keeping away from the riskier equity assets, tracking declining U.S. and European markets, even as the situation in Ukraine worsened.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 795.60 on Friday from its previous close of 797.09 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.70 on Friday, up from its previous close of 82.49 late Thursday in North American trade. The dollar scaled a high of 82.72 intraday and a low of 82.42.

The euro trended lower against the dollar at $1.3142 on Friday, as compared to its previous close of $1.3182 late Thursday in North American trade. The euro scaled a high of $1.3196 intraday and a low of $1.3138. In economic news from the U.S., the headline index of the Chicago Purchasing Managers report, an important gauge of manufacturing in the Midwest, jumped to 64.3 in August from 52.6 in July. The PMI number exceeded consensus estimates for a smaller rise to 56.0. The Chicago PMI in July was the largest decline since October 2008.

A U.S. Commerce Department report showed personal spending declined 0.1 percent in July. That followed an increase of 0.4 percent in the previous month. Economists expected consumer spending to rise by 0.2 percent.

Personal income rose for the month, though at a slower pace than economists had projected. The figure climbed 0.2 percent in the period, following an increase of 0.5 percent in June. Analysts anticipated a rise of 0.3 percent.

In other economic news, eurozone inflation slowed as expected in August on falling energy prices giving room for the central bank to support demand and economic recovery without stoking inflation and help the region create more jobs. The unemployment rate remained unchanged at an elevated level in July. Nonetheless, it was at the lowest since September 2012.

Inflation eased to 0.3 percent from 0.4 percent in July, flash report from Eurostat revealed Friday. The rate was in line with economists' expectations. It was the lowest inflation rate after prices started rising since November 2009.

A report from GfK showed consumer confidence in the U.K. to have rebounded to 1 in August, exceeding expectations for a score of -1.

Final estimates from Eurostat showed annual inflation in the eurozone to have eased to 0.3 percent in August from 0.4 percent in July, in line with estimates. Another report showed that the unemployment rate in the euro area remained unchanged at a 21-month low of 11.5 percent in July.