By Sara Sjolin, MarketWatch
LONDON (MarketWatch) — Gold futures retreated slightly on Thursday, as data showed demand for the metal slowed in second quarter, while a firmer dollar also added pressure.
Gold futures for December delivery GCZ2 +0.03% slipped 80 cents, or 0.1%, to 1,605.80 an ounce during electronic trade.
On Wednesday, gold prices snapped a two-day losing streak as a positive industrial production report from the U.S. fueled investor optimism.
The optimism was Thursday replaced with worries over global gold demand, as the World Gold Council said demand in the second quarter dropped 7%. Read: Gold demand drops 7% in second quarter.
Sharp falls in jewelry and investment demand drove the decline, while the biggest country-specific drop occurred in India, down 38% from the second quarter in 2011.
“Demand there had been dampened by the increase in import duties coupled with record-high local gold prices due to a weak Indian rupee,” analysts at Commerzbank said in a note.
A firmer dollar further weighed on gold prices. The ICE dollar index DXY +0.03% , which measures the greenback against six rival currencies, rose to 82.723 from 82.649 in late North American trade.
Dollar-denominated commodities tend to drop on a stronger dollar, as it makes them more expensive to other currency holders.
Elsewhere in the commodity complex, most metals edged lower.
Silver for September delivery SIU2 +0.07% fell 0.1% to $27.80 an ounce, while palladium for the same month PAU2 -0.19% lost 0.3% to $576.60 an ounce.
September copper HGU2 -0.06% gave up 0.1% to $3.35 a pound.
Sara Sjolin is a MarketWatch reporter, based in London.
