Gold Ends Lower On Strong Dollar, Fed Minutes

(RTTNews) - Gold futures ended lower for second straight session on Thursday, as investors turned to the riskier equity assets while continuing to weigh the Federal Reserve policy meet minutes. The dollar ticked higher against some major currencies after Fed Reserve officials expressed confidence that the U.S. economic recovery will continue into 2015.

Minutes of the latest Federal Reserve meet showed that policy makers expect the big drop in oil prices will probably boost U.S. growth. This could mean the Fed will raise interest rates sometime before mid-2015, a move that would likely weigh on gold prices.

Gold prices moved higher briefly after Labor Department report showed first-time claims for unemployment benefits in the U.S. to have decreased modestly last week, but short of expectations.

Gold for February delivery, the most actively traded contract, shed $2.20 or 0.2 percent to settle at $1,208.50 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for February delivery scaled an intraday high of $1,216.80 and a low of $1,204.20 an ounce.

On Wednesday, gold prices ended at $1,210.70 an ounce, down $8.70 or 0.7 percent, as the dollar trading higher with global equity markets making significant gains and and crude oil prices rebounding.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 704.83 tons on Thursday from its previous close of 707.82 tons on Wednesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 92.24 on Thursday, up from its previous close of 92.02 late Wednesday in North American trade. The dollar scaled a high of 92.53 intraday and a low of 91.94.

The euro trended lower against the dollar at $1.1800 on Thursday, as compared to its previous close of $1.1841 late Wednesday in North American trade. The euro scaled a high of $1.1849 intraday and a low of $1.1756.

In economic news from the U.S., first-time claims for unemployment benefits saw a modest decrease in the week ended January 3, a report from the Labor Department showed Thursday. The report said initial jobless claims edged down to 294,000, a decrease of 4,000 from the previous week's unrevised level of 298,000. Economists had expected jobless claims to dip to 290,000.

The U.S. Labor Department is scheduled to release its closely watched monthly employment report for December on Friday. Economists expect employment to increase by about 245,000 jobs in December after jumping by 321,000 jobs in November. The unemployment rate is expected to dip to 5.7 percent from 5.8 percent, hitting its lowest level since June of 2008.

Eurozone retail sales grew more-than-expected in November, at the same rate as in the previous month, preliminary data from Eurostat showed Thursday. Retail sales rose 0.6 percent from October, when they grew the same, revised from 0.4 percent. Economists had expected a modest gain of 0.2 percent.

Eurozone producer prices decreased more than expected in November on a sharp fall in energy prices, data from Eurostat revealed Thursday. Producer prices dropped 1.6 percent year-on-year in November, faster than the 1.3 percent decrease in October. Economists had forecast prices to decline 1.4 percent.

Eurozone economic confidence remained stable in December, with the sentiment index at 100.7, the same score as seen in October and November. It was expected to rise to 101.2. The economic confidence remained stable at the end of the year as the strength in consumer, retail and services confidence outweighed worsening industrial sentiment, a monthly survey by the European Commission showed Thursday.

Elsewhere in Europe, the Bank of England kept its key interest rate at a record low once again at the start of the year amid growing concerns about inflation falling below 1 percent in months ahead. The Monetary Policy Committee held the key bank rate at 0.50 percent and the asset purchases at GBP 375 billion.

German factory orders declined more-than-expected in November on a sharp contraction in domestic demand signaling weak economic activity in the largest euro area economy. Factory orders declined 2.4 percent month-on-month, reversing a revised 2.9 percent rise in October, Destatis said Thursday. Orders were expected to fall by 0.8 percent. This was the first drop in demand in three months.