The price of gold was holding onto its recent gains Friday morning despite speculation that the Federal Reserve would tapper its bond buying program sooner than expected. Traders speculate physical demand will support bullion prices after recent data revealed higher gold consumption in India and China.
Gold for December delivery, the most actively traded contract, edged up $0.90 to $1,361.80 an ounce. Yesterday, gold settled sharply higher near a two-month high with investors seeking safe haven in the precious metal while tracking declining U.S. equity markets. A slew of upbeat macroeconomic data from the U.S. and Europe again renewed investor concerns the Federal Reserve would likely slash its quantitative easing program, sooner rather than later.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 912.92 tons from 913.23 tons.
Meanwhile, the U.S. dollar was slipping back near its weekly low versus the euro and extending its two-month low against sterling. The buck was trading lower versus the Swiss franc and the yen.
In economic news, the euro zone current account surplus declined in June mainly due to a fall in visible trade surplus, monthly data from the European Central Bank showed. The current account surplus decreased to a seasonally adjusted EUR 16.9 billion from EUR 19.5 billion in May.
Meanwhile, final data from the Eurostat revealed that euro zone's annual inflation stayed unchanged in July as estimated earlier. The harmonized index of consumer prices increased 1.6 percent on an annual basis in July, which was unchanged from the growth recorded in June. The outcome also matched the preliminary estimates.
In a separate report, the Eurostat said euro zone exports expanded in June after falling for two consecutive months. Exports advanced 3 percent in June from May, when it decreased by 2.6 percent. Likewise, imports rose 2.5 percent, offsetting the 2.1 percent fall in May.
From the U.S., the Commerce Department is scheduled to release its housing starts report for July at 8:30 a.m. ET. Economists estimate housing starts to come in at a seasonally adjusted annual rate of 900,000 in June, while building permits are expected at 935,000.
Reuters and the University of Michigan are scheduled to release their preliminary consumer sentiment index based on a survey at 9:55 am ET. The consensus estimates call for an increase in the index to 85.5 in August from 85.1 in July.
