Gold Ends Lower As Dollar Strengthens

(RTTNews) - Gold futures ended lower for a second straight session on Friday, as the dollar strengthened against a basket of some major currencies, after some mixed economic data from the U.S. with industrial production rising more than expected in July.

Gold prices appeared to be clinging to strong weekly gains amid speculation the Federal Reserve might delay hiking interest rates. So far, there's no telling how the Fed will react to China's surprising currency devaluation, after some positive economic news earlier today.

In some upbeat economic news, producer prices in the U.S. rose slightly more than expected in July, while industrial production increased more than expected in July.

Gold has been trending higher after investors weighed the impact of China's surprise move to devalue its currency. The yuan has lost nearly 3 percent since the devaluation earlier this week.

Gold for December delivery, the most actively traded contract, shed $2.90 or 0.3 percent, to settle at $1,112.70 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,120.40 and a low of $1,111.10 an ounce.

On Thursday, gold prices for December delivery dropped $8.00 or 0.7 percent, to settle at $1,115.60 an ounce, as the dollar trended higher and after Chinese central bank officials defended its move to devalue the yuan spurring a recovery in global equity markets.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 671.87 tons on Friday, from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.51 on Friday, up from its previous close of 96.36 in late North American trade on Thursday. The dollar scaled a high of 96.68 intraday and a low of 96.09.

The euro trended lower against the dollar at $1.1122 on Friday, as compared to its previous close of $1.1151 in North American trade late Thursday. The euro scaled a high of $1.1190 intraday and a low of $1.1099.

In economic news, producer prices in the U.S. rose slightly more than expected in July, partly reflecting an increase in prices for services, the Labor Department said Friday. The producer price index edged up 0.2 percent in July after climbing by 0.4 percent in June. Economists expected the index to inch up by just 0.1 percent.

Consumer sentiment in the U.S. deteriorated unexpectedly in August, a report from the University of Michigan showed Friday. The preliminary reading on the consumer sentiment index for August came in at 92.9 compared to the final July reading of 93.1. Economists expected the index to climb to a reading of 93.5.

U.S. industrial production increased more than expected in July, with manufacturing output showing a notable rebound, a Federal Reserve report showed Friday. Industrial production climbed 0.6 percent in July after inching up 0.1 percent in June. Economists expected production to increase by about 0.4 percent.

Eurozone economic growth slowed slightly in the second quarter despite slight improvement in Germany, as France came to a halt, restoring the divergence between the two largest euro area economies. Gross domestic product expanded 0.3 percent sequentially in the June quarter, preliminary data from Eurostat showed Friday. The rate of growth was expected to remain unchanged at 0.4 percent.

U.K. construction output recovered in June albeit at a slower than expected pace, the Office for National Statistics revealed Friday. Construction output grew 0.9 percent in June from down 1 percent May. Nonetheless, it was weaker than the expected growth of 2 percent.