Gold Ends Lower On Strong Dollar, Data

(RTTNews) - Gold futures ended sharply lower for a second straight day Wednesday, as investors opted for profit taking after the dollar strengthened against a select band of currencies, on some upbeat global macroeconomic data with a better-than-expected U.S. new home sales and eurozone private sector activity expansion.

New home sales in the U.S. rose much more than anticipated in June, a Commerce Department report showed Wednesday, which also revealing downward revisions to the data for the past few months. From the eurozone, private sector activity expanded more-than-expected to an 18-month high in July, signaling an early exit from recession in the third quarter, data from Markit Economics showed.

Gold prices were also impacted after China's manufacturing purchasing managers' index, an indicator of the country's factory sector performance, for July declined to its lowest level in eleven months, a survey by Markit Economics and HSBC showed Wednesday. The PMI dropped to 47.7 in July from 48.2 in June, with a reading below 50 suggesting deterioration in activity.

Gold for August delivery, the most actively traded contract, dropped $15.00 or 1.1 percent to close at $1,319.70 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.

Gold for August delivery scaled an intraday high of $1,348.70 and a low of $1,313.50 an ounce.

Yesterday, gold leveled-off from its one-month high to end lower on profit taking with little economic cues for direction, notwithstanding the dollar trading lower against a basket of major currencies. The precious metal had registered its biggest one-day gain in over a year in the previous session.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 929.76 tons from 931.26 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.38 on Wednesday, up from 82.03 late Tuesday in North American trade. The dollar scaled a high of 82.27 intraday and a low of 81.94.

The euro traded lower against the dollar at $1.3183 on Wednesday, as compared to $1.3224 late Tuesday in North America. The euro scaled a high of $1.3254 intraday and a low of $1.3178.

In economic news from the U.S., the Commerce Department said new home sales surged 8.3 percent to an annual rate of 497,000 in June from the revised May rate of 459,000. Economists expected new home sales to climb to an annual rate of 481,000 from the 476,000 originally reported for the previous month.

Elsewhere, eurozone private sector activity increased more than expected in July, a preliminary report from Markit Economics showed. The flash composite output index that measures business activity in both manufacturing and services sectors, rose to an 18-month high of 50.4 in July from 48.7 in June. Economists had forecast the index to rise to 49.1.

German private sector business activity rose at the fastest pace in five months in July, preliminary results of a survey by Markit Economics showed. The composite output index that measures performance of both manufacturing and services, rose to a five-month high of 52.8 in July from 50.4 in June. Readings above 50 indicates expansion in activity.