BU: GOLD TREADING NEAR 5-YR LOW, DOLLAR SURGES ON US DATA
Gold prices were lingering near the lowest price in five years amid signs that the US economy is recovering from the lacklustre first quarter.
Gold for December delivery on the Comex division of the New York Mercantile Exchange was last down $7.90 or 0.7 percent to $1,084.70 per ounce. Trade has ranged from $1,081.0 to $1,097.50.
US advance GDP in the second quarter was up 2.3 percent with revised first quarter GDP at 0.6 percent. Both numbers were below expectations, but still demonstrate a strengthening US economy with an annualized rate of growth over two percent.
Weekly unemployment claims were 267,000, below forecasts of 268,000 and follows the previous reading which was the lowest number of claims since 1973. Additionally, advance GDP price index in June was two percent, above the 1.5 percent estimate.
The data follows a Federal Open Market Committee (FOMC) statement where investors debated whether the tone was hawkish or dovish. The FOMC indicated that the labour market was improving, but inflation was still lagging.
“Gold stayed within recent ranges, with the latest FOMC statement providing few additional indications on Fed policy,” Joni Teves, an analyst at UBS, said. “We think choppy trading is likely to become a feature of the market in the weeks and months ahead, especially as interest and participation levels remain low.”
Turning to wider markets, Germany’s DAX and France’s CAC-40 were up 0.2 percent and 0.5 percent respectively, while the euro was 0.4 percent weaker at $1.0948 against the dollar.
In eurozone data, the German unemployment for June came in worse than expected, rising 9,000, instead of falling 5,000. The Spanish flash CPI at 0.0 percent and GDP for July at one percent also undershot.
Germany preliminary CPI month-over-month in July was 0.2 percent, in-line with forecasts.
As for other precious metals, Comex silver for September delivery declined 4.8 cents to 14.695 per ounce. Trade has ranged $14.580 to $14.815.
Platinum for October settlement rose 30 cents to $985.20 per ounce, while the most actively traded palladium contract was at $621.80 per ounce, up $6.20.
