Gold Settles Lower On Upbeat Data; Gains 6% For Month

(RTTNews) - Gold futures ended lower on Friday, with investors opting for the riskier equity assets after a couple of encouraging economic data from the U.S. with consumer sentiment rising and a better-than-expected Chicago business activity index. The dollar also trended sharply lower against a basket of major currencies, making gold expensive for holders of foreign currencies.

Gold, however, gained about 6 percent for the month.

Geopolitical tensions in Ukraine continued to weigh, with investors on edge over the possible Russian response to the volatile situation unfolding in the Crimea region of the beleaguered country.

Consumer sentiment in the U.S. saw a modest improvement in February, a Thomson Reuters and the University of Michigan report showed Friday. Meanwhile, a report from MNI Indicators on Friday showed Chicago-area business activity growth to have unexpectedly accelerated in February.

Two top officials at the Federal Reserve say they have not changed their outlook for relatively strong growth in 2014 despite evidence the U.S. economy expanded at a far less robust pace than initially believed in the fourth quarter. Speaking to CNBC, St. Louis Fed President James Bullard said he remains optimistic about 2014 despite this winter's rough patch.

Earlier, a Commerce Department report showed the U.S. economy to have grown much less than initially indicated in the fourth quarter of 2013, with consumer spending rising at a notably slower than previously estimated rate. U.S. GDP expanded at a 2.4 percent annual rate in the fourth quarter, down sharply from the 3.2 percent growth reported last month and the 4.1 percent logged in the third quarter. Economists expected the pace of GDP growth to be downwardly revised to 2.5 percent.

Nevertheless, in some encouraging economic news from Europe, Germany's retail sales grew at the fastest pace in seven years in January, staging a strong recovery from the slump in the final month of 2013.

Gold for April delivery, the most actively traded contract, dropped $10.20 or 0.8 percent to close at $1,321.60 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for April delivery scaled an intraday high of $1,333.60 and a low of $1,321.30 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 803.70 tons from previously.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.78 on Friday, down from its previous close of 80.29 late Thursday in North American trade. The dollar scaled a high of 80.31 intraday and a low of 79.75.

The euro traded higher against the dollar at $1.3810 on Friday, as compared to its previous close of $1.3710 late Thursday in North America. The euro scaled a high of $1.3823 intraday and a low of $1.3694.

In economic news, the Thomson Reuters and the University of Michigan consumer sentiment index for February was upwardly revised to 81.6 from the preliminary reading of81.2. The revision saw the index came in modestly above January's final reading of 81.2 as well as economist estimates of 81.5.

The MNI Indicators' Chicago Business Barometer ticked up to 59.8 in February from 59.6 in January, with a reading above 50 indicating growth in Chicago-area business activity. Economists expected the barometer to drop to a reading of 56.4.

A report from the National Association of Realtors on Friday showed pending home sales index in the U.S. inched up 0.1 percent to 95.0 in January after falling 5.8 percent to a revised 94.9 in December. Economists expected pending sales at 2.3 percent. Despite the modest increase, pending home sales index is well below the reading of 104.4 in January 2013.

German retail sales were up a calendar and seasonally adjusted 2.5 percent in January, representing the biggest increase since February 2007, data from Destatis showed Friday. Economists expected a 1 percent increase for January compared to the 2.1 percent drop in December, which was upwardly revised from the 2.5 percent decline estimated initially.

Eurozone inflation remained unchanged in February, lowering the pressure on the central bank to take action at the policy meeting next week to overcome fears of deflation. Unemployment in the region held steady at an elevated level in January, despite economic recovery taking hold, official data revealed Friday.