Gold Ends Lower On Upbeat U.S. Data, Strong Dollar

(RTTNews) - Gold futures ended lower for a second straight session on Thursday, as the dollar strengthened against a basket of major currencies after a slew of upbeat economic data from the U.S., led by a better than expected unemployment benefit claims report and a better than anticipated retail sales growth.

The precious metal was impacted by a strong dollar, even as global equity markets bounced back strongly on the back of some robust U.S. economic data.

The mostly upbeat economic data from the U.S. had investors opting for the riskier equity assets, with first-time claims for U.S. unemployment benefits edging lower in the week ended December 6.

Meanwhile, a Commerce Department report showed U.S. retail sales to have risen more than expected in November, generating some optimism over the holiday shopping season while signaling significant overall economic growth.

Business inventories in the U.S. also edged higher in October, while U.S. import prices in November declined sharply with fuel prices showing another substantial drop.

Some subdued demand for longer-term loans at the European Central Bank's second offering this month has boosted the case for a full-blown quantitative easing to meet its goal of boosting the balance sheet by EUR 1 trillion and to avert the threat of deflation in the euro area.

Gold for February delivery, the most actively traded contract, dropped $3.80 or 0.3 percent to settle at $1,225.60 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for February delivery scaled an intraday high of $1,233.40 and a low of $1,216.40 an ounce.

On Wednesday, gold futures ended at $1, 229.40 an ounce, down $2.60 or 0.2 percent, weighed down by worries over the political unrest in Greece and the Chinese government's decision to tighten short-term loans. Traders were also mulled the prospects of U.S. interest rate hikes happening sometime soon.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged higher to 724.80 tons on Thursday, from its previous close of 721.81 tons on Wednesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 88.69 on Thursday, up from its previous close of 88.23 late Wednesday in North American trade. The dollar scaled a high of 88.77 intraday and a low of 87.95.

The euro trended lower against the dollar at $1.2379 on Thursday, as compared to its previous close of $1.2447 late Wednesday in North American trade. The euro scaled a high of $1.2497 intraday and a low of $1.2373.

In economic news from the U.S., a report from the U.S. Labor Department showed jobless claims to have declined to 294,000 in the week ended December 6, down 3,000 from the previous week's unrevised figure of 297,000. Economists had expected claims to slip to 295,000.

Meanwhile, a report from the Commerce Department showed U.S. retail sales to have climbed by a more than expected 0.7 percent in November, following an upwardly revised 0.5 percent increase in October. Economists had forecast a 0.4 percent increase in retail sales.

Business inventories in the U.S. inched up by 0.2 percent in October, after rising 0.3 percent in September. This was in line with economists' expectations. Business sales edged down by 0.1 percent in October after coming in unchanged in September.

U.S. import prices in November dropped sharply with fuel prices falling significantly, a Labor Department report showed. Import prices tumbled 1.5 percent in November after slumping by a revised 1.2 percent in October. Economists expected import prices to fall by about 1.7 percent compared to the 1.3 percent drop originally reported for the previous month.

In economic news from the eurozone, the European Central Bank's second offering of its targeted longer term refinancing operation saw demand for loans by banks remaining weak. However, with EUR 129.84 billion of the EUR 317 billion offering getting allotted to 306 banks, the take-up was better than what was seen in the previous round in September.