Gold Ends Lower But Gains 1% On Week

(RTTNews) - Gold futures ended lower for a second straight session on Friday, after some upbeat economic data from the U.S. with producer prices and consumer sentiment rising more than expected. The drop comes even as the dollar continued to fluctuate against a basket of some major currencies.

Nevertheless, gold prices gained about 1 percent for the week.

Investors continue to look for cues as to when a rate hike would occur, an remain unsure of the outlook for rate hikes from the Federal Reserve. As a result, the precious metal has been trading in a steady range for the past few weeks.

Some upbeat data this week including the strong retail sales report indicate the U.S. economy is poised to recover from a soft first quarter.

The Federal Open Market Committee is scheduled to hold its meeting next week, which will be closely watched for any indicators to interest rate hikes by the Federal Reserve.

The developments in Europe also continued to weigh on gold. The International Monetary Fund announced yesterday that it has pulled out of talks with Greece, placing the blame on Athens. Creditors remain frustrated over Greece's response to its debt crisis and the onus is now on Greece to do more to unlock bailout funds before its euro-area bailout package expires on June 30.

Gold for August delivery, the most actively traded contract, slipped $1.20 or 0.1 percent to settle at $1,179.20 an ounce, on the Comex division of the New York Mercantile Exchange on Friday.

Gold for August delivery scaled an intraday high of $1,183.70 and a low of $1,175.60 an ounce.

On Thursday, gold prices dropped $6.20 or 0.5 percent to settle at $1,188.40 an ounce, as the dollar strengthened after an upbeat U.S. retail sales data in May, sparking speculations of an interest rate hike by the Federal Reserve later this year.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 704.22 tons on Friday from its previous close of 705.72 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 94.86 on Friday, down from its previous close of 95.10 on Thursday in late North American trade. The dollar scaled a high of 95.68 intraday and a low of 94.69.

The euro trended higher against the dollar at $1.1277 on Friday, as compared to its previous close of $1.1258 in North American trade late Thursday. The euro scaled a high of $1.1296 intraday and a low of $1.1152.

On the economic front, producer prices in the U.S. rose slightly more than anticipated in May, with the price growth largely reflecting a substantial rebound in energy prices, a report from the Labor Department showed Friday. Producer price index for final demand rose by 0.5 percent in May following a 0.4 percent drop in April. Economists expected prices to increase by 0.4 percent.

Consumer sentiment in the U.S. improved much more than anticipated in June, a report from the University of Michigan said Friday. A preliminary reading on the consumer sentiment index for June came in at 94.6 compared to the final May reading of 90.7. Economists expected the index to increase modestly to 91.2.

Eurozone industrial production grew only marginally in April as energy and consumer goods output remained weak, signaling that economic recovery is set to slow in the second quarter. Industrial production edged up 0.1 percent month-on-month, rebounding from a 0.4 percent fall in March, figures from the Eurostat showed Friday. Economists had expected 0.4 percent growth.

Germany's wholesale prices continued to decline in May, but at a slower pace than in the prior month, figures from Destatis showed Friday. Wholesale prices fell 0.4 percent year-over-year in May, following a 0.9 percent decrease in April. The measure has been falling since July 2013.

U.K. construction output declined unexpectedly in April after rebounding in the prior month, the Office for National Statistics said Friday. Construction output fell 0.8 percent from March when it grew 1.4 percent. Output has so far dropped for three months this year. It was expected to rise 0.1 percent.