Gold Ends Lower On Continued Fed Concerns

(RTTNews) - Gold futures ended lower for a fifth straight session Wednesday, after trading higher for most of the day, on continued concerns over the U.S. Federal Reserve next move on scaling down its quantitative easing program, with speculations it could begin by December. Investors also await cues from some key economic data later in the week, even as the dollar weakened against some major currencies.

Meanwhile, a member of the Federal Reserve, Narayana Kocherlakota -- president of Minneapolis Federal Reserve, told the St. Paul Chamber of Commerce that the central bank might hinder an already tepid economic recovery by reducing the size of its $85 billion per month bond buying program. Kocherlakota believes the Fed has plenty of room to maintain its quantitative easing program, or QE3, since fears of inflation have not materialized.

Nonetheless, Dallas Fed President Richard Fisher cautioned the market should get ready for a cut in quantitative easing program soon, even as Atlanta Fed President Dennis Lockhart opined the central bank could well begin tapering as early as December.

Elsewhere, China's Communist Party agreed to offer bigger role for markets in the world's second largest economy as part of the sweeping reforms outlined by party leadership during the Third Plenum meeting that concluded in Beijing on Tuesday, with out providing further details.

Gold for December delivery, the most actively traded contract, dropped $2.80 or 0.2 percent to close at $1,268.40 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,279.80 and a low of $1,265.00 an ounce.

Yesterday, gold settled lower on concerns the Federal Reserve would begin scaling down its quantitative easing program by the end of the year even as investors awaited some key economic data later in the week, including the U.S. trade balance, weekly jobless claims and industrial production.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 868.42 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.98 on Wednesday, down from 81.15 late Tuesday in North American trade. The dollar scaled a high of 81.28 intraday and a low of 80.87.

The euro traded higher against the dollar at $1.3453 on Wednesday, as compared to its previous close of $1.3435 late Tuesday in North America. The euro scaled a high of $1.3470 intraday and a low of $1.3390.

In economic news, industrial production in the euro area decreased more-than-expected in September, after recording a modest growth in the previous month, latest data showed. Industrial production dropped a seasonally adjusted 0.5 percent month-on-month in September, reversing the previous month's 1 percent increase, statistical office Eurostat said. Economists had forecast a 0.3 percent contraction for September.

British unemployment claims declined more than expected by economists in October, while the jobless rate edged lower in the three-months to September, data from the Office for National Statistics showed. The claimant count for October fell by 41,700 from a month earlier to 1.31 million, the lowest level since January 2009. Economists had forecast a decline of 30,000. The claimant count rate fell to 3.9 percent from 4 percent in September.