Gold Plunges To End At 5-Week Low On Fed Concerns

(RTTNews) - Gold futures plummeted to end at a five-week low for a fourth straight session Friday, on investor concerns following some mixed macroeconomic data out of the U.S., ahead of the Federal Open Market Committee next week. The precious metal settled at its lowest since August 7, as speculations were rife of an imminent cut to the U.S. Federal Reserve's quantitative easing program, even as anxiety over Syria persisted.

Gold prices shed 4.9 percent for the week.

In some disappointing economic news, retail sales in the U.S. rose less than expected in August, while a report from Thomson Reuters and the University of Michigan showed consumer sentiment in the U.S. to have deteriorated much more than anticipated in September.

Meanwhile, U.S. business inventories rose by more than expected in July, even as producer prices climbed more than anticipated in August, helped by notable increases in food and energy prices.

Gold for December delivery, the most actively traded contract, plunged $22.00 or 1.7 percent to close at $1,308.60 an ounce Friday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,330.80 and a low of $1,304.60 an ounce.

Yesterday, gold lost over 2 percent to settle near its one-month low on some upbeat initial jobless claims benefit data, raising fears of an imminent cut to the Federal Reserve's quantitative easing program. Gold was also impacted after having lost its safe haven appeal with little or no possibilities of an immediate U.S. military strike against Syria and as investors anxiously await the outcome of the Federal Open Market Committee policy meet next week.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 917.13 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.47 on Friday, down from 81.53 late Thursday in North American trade. The dollar scaled a high of 81.74 intraday and a low of 81.40.

The euro traded higher against the dollar at $1.3305 on Friday, as compared to its previous close of $1.3299 late Thursday in North America. The euro scaled a high of $1.3321 intraday and a low of $1.3256.

In economic news from the U.S, the Commerce Department said retail sales rose by 0.2 percent in August following an upwardly revised 0.4 percent increase in July. Economists had expected sales to climb by 0.5 percent compared to the 0.2 percent growth originally reported for the previous month. Excluding an increase in sales by motor vehicle and parts dealers, retail sales inched up by 0.1 percent in August compared to a 0.6 percent increase in July.

Separately, the US Labor Department said its producer price index rose by 0.3 percent in August after coming in unchanged in July. The index had been expected to edge up by 0.2 percent. Meanwhile, the core producer price index, which excludes food and energy prices, came in unchanged in August after inching up by 0.1 percent in the previous month.

A Commerce Department report on Friday showed U.S. business inventories to have risen more than expected in the month of July. Business inventories climbed by 0.4 percent in July following a revised 0.1 percent increase in June. Economists expected inventories to increase by 0.3 percent.

Consumer sentiment in the U.S. deteriorated much more than anticipated in September, a report from Thomson Reuters and the University of Michigan showed Friday. A preliminary reading on the consumer sentiment index for September came in at 76.8, down from August's final reading of 82.1. Economists expected the index to edge down to 82.0. The consumer sentiment index dropped to its lowest level since hitting 76.4 in April.

Meanwhile, the pace of decline in the number of employed persons in euro area eased in the second quarter, according to the latest data released by Eurostat. Employment fell 0.1 percent quarter-on-quarter to 145 million in the second quarter, slower than a 0.4 percent drop recorded in the first quarter. On an annual basis, employment fell 1 percent, at the same pace as in the previous quarter.

Elsewhere, production in the British construction sector increased in July after falling in the previous month as the volumes of both new work and maintenance increased, data released by the Office for National Statistics showed. The volume of output in the construction sector grew a seasonally adjusted 2.2 percent sequentially in July, recovering from the the 1.1 percent decrease recorded in June.