Gold Ends A Tad Higher On Disappointing Data

(RTTNews) - Gold futures ended slightly higher on Friday, on some disappointing economic news from the U.S. with both producer prices and consumer sentiment falling short of expectations, even as the dollar trended higher against a basket of some major currencies.

For the week, gold prices shed about 1 percent.

Investors now await the upcoming crucial Federal Open Market Committee meeting next week where the Fed Reserve could provide cues on interest rate hikes.

Nonetheless, the gains made by gold were muted as the dollar jumped 1.3 percent against the euro, once again reaching its highest level versus the European currency in twelve years. The greenback topped the historic 100 barrier against a basket of six major currencies, with the index touching 100.28 before falling back slightly.

The dollar has recently benefited from expectations of higher interest rates, raising concerns about profits at American multinationals.

Investors mulled over some disappointing economic data after a U.S. Labor Department report showed producer prices to have unexpectedly declined in February, although analysts say the drop was primarily due to a quirk in the calculation of margins.

Consumer sentiment in the U.S. also unexpectedly deteriorated in March, preliminary results of a survey by the University of Michigan showed Friday.

Gold for April delivery, the most actively traded contract, inched up $0.50 to settle at $1,152.40 an ounce, on the Comex division of the New York Mercantile Exchange on Friday. Gold for April delivery scaled an intraday high of $1,160.90 and a low of $1,150.40 an ounce.

On Thursday, gold ended at $1,151.90 an ounce, up $1.30 or 0.1 percent, after the dollar dropped after retail sales in the U.S. unexpectedly declined.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 750.95 tons on Friday, from its previous close of 753.04 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 100.21 on Friday, up from its previous close of 99.27 on Thursday in late North American trade. The dollar scaled a high of 100.37 intraday and a low of 99.20. The dollar scaled its highest in the last one year intraday.

The euro trended lower against the dollar at $1.0479 on Friday, as compared to its previous close of $1.0637 in North American trade late Thursday. The euro scaled a high of $1.0637 intraday and a low of $1.0468, the lowest in the last one year.

In economic news, producer prices in the U.S. unexpectedly decreased in February, a report from the Labor Department showed Friday, although analysts said the drop was primarily due to a quirk in the calculation of margins. The producer price index for final demand fell by 0.5 percent in February after slumping by 0.8 percent in January. Economists expected producer prices to rise by about 0.3 percent.

Consumer sentiment in the U.S. unexpectedly deteriorated in March, preliminary results of a survey by the University of Michigan showed. Consumer sentiment index tumbled to 91.2 in March from the final February reading of 95.4. Economists expected the consumer sentiment index to inch up to a reading of 96.0.

From the eurozone, Germany's wholesale prices declined at a slower pace in February, data from Destatis showed Friday. Wholesale prices decreased 2.1 percent year-on-year in February, slower than the 2.6 percent decline seen in January. The wholesale price index has been declining since July 2013.

U.K. construction output declined unexpectedly in January, marking its first annual fall in nearly two years, dampened by weaker housing, data from the Office for National Statistics revealed Friday. Construction output dropped 3.1 percent year-on-year, in contrast to a 5.3 percent growth in December. Economists had forecast a gain of 2.1 percent. This was the first year-on-year decrease since May 2013 when it fell by 2.8 percent, the ONS said.