MW: Gold falls for second day as dollar rises vs. euro
Gold futures fell Wednesday for a second session, down slightly as the U.S. dollar rose against the euro, lessening the metal's investment appeal.
The dollar extended its gains into a second day, after reports that a European Central Bank policy maker has indicated that the door remained open to a further cut in official interest rates for the euro zone. A stronger greenback tends to apply downward pressure on dollar-denominated gold prices.
In early North American electronic trading, gold for June delivery fell $2.20 an ounce, off 0.2% to stand at $951.10. The metal had gained 3% last week. Broad selling was the rule for the major contracts in metals futures in early action.
The stronger dollar "sapped some of the resilience" that gold's shown of late, said Jon Nadler, senior analyst at Kitco Metals Inc.
"Rising oil prices, and North Korean missile-rattling failed to motivate gold to higher ground for the time being," he added.
Investors were also awaiting data detailing U.S. existing-home sales for April. Economists surveyed by MarketWatch expect home sales to have risen 2.8% to 4.7 million units, which would mark a reversal after a 3% decline in March.
Erkki Liikanen, a member of the European Central Bank's governing council, reportedly told a Finnish business publication that the institution's current 1% lending rate is "appropriate" but that room remains to lower the rate further if needed. See Currencies.
Also creating crosscurrents for gold, crude-oil futures rose ahead of the release of U.S. government data on weekly petroleum inventories, topping $63 a barrel in overnight electronic trading. Rising oil prices tend to increase demand for gold as a hedge against inflation.
Holdings in the SPDR Gold Trust (GLD 93.80, +0.04, +0.04%) , the biggest exchange-traded fund backed by gold, stood at 1,118.76 tons on Tuesday, unchanged from the previous session, according to latest data from the fund.
In other metals trading Wednesday, silver for July delivery skidded 4.5 cents, or 1.3%, to $14.555 an ounce, while July copper fell 2.6 cents, or 1.2%, to $2.115 a pound. The June palladium contract sank $3.05, or 1.3%, to $228.50 an ounce, while July platinum lost $2.20, or 0.2%, to $1,137.60 an ounce.
