Gold Ends Lower On Strong Dollar, Stimulus Concerns

(RTTNews) - Gold futures ended sharply lower on Thursday, as the dollar strengthened against some major currencies after the U.S. Federal Reserve kept its quantitative easing program intact following a policy review meet yesterday. Although gold thrives on any hints of stimulus, investor concerns grew on speculative reports that the monthly bond buying program may be tapered down by the Fed earlier than expected.

For the month, gold prices shed about 0.3 percent.

In economic news, first-time claims for U.S. unemployment benefits dropped for the third consecutive week, although the decline was less than what economists expected. Meanwhile, the Chicago Business Barometer showed a sharp unexpected increase in October indicating growth in business activity.

Gold for December delivery, the most actively traded contract, plunged $25.60 or 1.9 percent to close at $1,323.70 an ounce Thursday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,343.00 and a low of $1,318.70 an ounce.

Yesterday, gold settled higher with the dollar trending lower on some soft private jobs data and ahead of the Fed policy meet outcome, with investors confident the Fed would refrain from any cut to its quantitative easing program.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 872.02 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.18 on Thursday, up from 79.75 late Wednesday in North American trade. The dollar scaled a high of 80.22 intraday and a low of 79.68.

The euro traded lower against the dollar at $1.3597 on Thursday, as compared to its previous close of $1.3736 late Wednesday in North America. The euro scaled a high of $1.3738 intraday and a low of $1.3588.

In economic news from the U.S., the Labor Department said initial jobless claims dipped to 340,000, a decrease of 10,000 from the previous week's unrevised figure of 350,000. Economists had expected jobless claims to fall to 335,000.

Chicago-area business activity unexpectedly grew at a substantially accelerated rate in October, a report from MNI Indicators showed Thursday. The Chicago Business Barometer jumped to 65.9 in October from 55.7 in September, with a reading above 50 indicating growth in business activity. Economists expected the index to edge down to 55.0. The index rose for the fourth straight month and is at its highest level since March 2011.

Eurozone inflation reached a four-year low in October driven by the strength of the euro, while the unemployment rate remained at a record high in September, suggesting additional measures are needed to preserve the recovery, official data showed Thursday. Eurozone inflation dropped to 0.7 percent in October, the lowest rate since November 2009, flash estimate published by Eurostat showed. The rate was expected to stay unchanged at 1.1 percent in October.

Elsewhere, Germany's forward-looking consumer confidence index declined unexpectedly heading into November, a survey by market research group GfK revealed. The confidence index edged down to 7 in November from 7.1 in October. Economists expected an increase to 7.2.

Germany's retail sales unexpectedly declined for a second straight month in September, data released by Destatis showed on. Retail sales dropped a calendar-and-seasonally-adjusted 0.4 percent month-on-month, while economists' consensus was a 0.4 percent gain. In August, sales fell 0.2 percent.

Meanwhile, eurozone inflation slowed unexpectedly in October largely due to a notable fall in energy prices, official data showed. Inflation fell to 0.7 percent in October from 1.1 percent in September, flash estimate published by Eurostat revealed. The rate was expected to stay unchanged at 1.1 percent in October.