The price of gold was extending losses Wednesday morning amid speculation that the US Federal Reserve might tapper stimulus program earlier than expected, following a recent batch upbeat macroeconomic data.
Gold for December delivery, the most actively traded contract, shed 6.20 to $1,276.30 an ounce. Yesterday, gold settled below the $1,300-mark for the first time in three weeks on continued uncertainties over the U.S. Federal Reserve's plans for scaling down its quantitative easing program following a slew of recent upbeat macroeconomic data. The precious metal was also weighed down by subdued physical demand from India and China, notwithstanding the dollar trading lower against a basket of some major currencies with the euro on the rise.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 915.04 tons from 917.14 tons.
Meanwhile, the U.S. dollar slipped back near a 2-month low versus the euro, the Swiss franc and the yen, while lingering around a 2-week low against sterling.
In economic news from the euro zone, Germany's industrial production increased in June at a faster rate than expected by economists, latest data showed. Industrial production increased a seasonally adjusted 2.4 percent month-on-month in June, recovering from the previous month's revised 0.8 percent decrease, preliminary estimates from the Federal Ministry of Economics and Technology showed. Economists had forecast output to rise 0.3 percent, following May's originally recorded 1 percent fall.
Switzerland's consumer prices remained unchanged in July from a year ago, after falling 0.1 percent in June, the Federal Statistical Office said. Economists had forecast prices to drop 0.1 percent.
Elsewhere, Bank of England issued an explicit guidance on the future conduct of monetary policy. The Monetary Policy Committee, led by Governor Mark Carney, "intends at a minimum to maintain the current highly stimulative stance of monetary policy until economic slack has been substantially reduced, provided this does not entail material risks to either price stability or financial stability", the central bank said in a statement.
Meanwhile, the prices of silver and platinum were ticking lower in morning deals.
