Gold Settles Lower On Fed Uncertainty

(RTTNews) - Gold futures ended lower for a third straight session Tuesday, as the dollar strengthened against a basket of major currencies and on continued uncertainty over prospects of the Federal Reserve tapering down its monthly $85 billion bond-buying program at its next meeting in October.

Gold for December delivery, the most actively traded contract, dropped $10.70 or 0.8 percent to close at $1,316.30 an ounce Tuesday on the Comex division of the New York Mercantile Exchange.

Gold for December delivery scaled an intraday high of $1,329.40 and a low of $1,305.50 an ounce.

Yesterday, gold settled marginally lower after investors resorted to profit taking while mulling the prospect of a cut to the Federal Reserve's $85 billion monthly bond-buying program in October.

Last week, the Fed decided against any cut to its quantitative easing program, citing concerns that Congress will bicker about raising the debt ceiling and as well on sluggish growth in the jobs market. Subsequently, an influential voting member of the central bank indicated the Fed may consider scaling down its asset purchase program in October if the economy showed any significant signs of recovery.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 909.59 tons from 910.19 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.52 on Tuesday, up from 80.46 late Monday in North American trade. The dollar scaled a high of 80.62 intraday and a low of 80.40.

The euro traded lower against the dollar at $1.3487 on Tuesday, as compared to its previous close of $1.3493 late Monday in North America. The euro scaled a high of $1.3519 intraday and a low of $1.3466.

In economic news from the U.S., the Standard & Poor's said that the S&P/Case-Shiller 20-City Composite Home Price Index rose 0.6 percent on a seasonally adjusted basis in July following a 0.9 percent increase in June. Economists had expected the index to rise by 0.8 percent.

Separately, a Conference Board report showed U.S. consumer confidence to have deteriorated slightly more than anticipated in September. The Conference Board's consumer confidence index dipped to 79.7 in September from an upwardly revised 81.8 in August. Economists expected the index at 80.0 from the 81.5 originally reported for the previous month.

From the eurozone, German business confidence continued to improve in September, but remained below economists' expectations, reports said citing survey results from the Ifo Institute. The business climate index edged up to 107.7 in September from a revised reading of 107.6 in August. Economists expected a reading of 108. The Ifo business expectations index rose to 104.2 in September from 103.3 in the previous month. This was forecast to rise to 104.