Gold Snaps 7-Day Gain To End A Shade Lower

(RTTNews) - Gold futures snapped a seven-day gain to end slightly lower on Wednesday, after fluctuating for much of the day as investors weighed some mixed economic data from the U.S. with housing starts rising more than expected, while building permits issued dropped unexpectedly in December.

Investors also mulled over the the geopolitical tensions in Ukraine, uncertainty in Greece with the upcoming general elections and the roil created by the Swiss National Bank euro move.

Gold futures briefly edged above $1300 for the first time since last summer on mounting speculation the European Central Bank will introduce fresh stimulus to pep-up the eurozone economy.

The ECB has been stubbornly holding off on full-scale quantitative easing until now, but some dreadful economic data and the threat of deflation could see some kind of additional stimulus on Thursday.

Meanwhile, the Bank of Japan, struggling to get that nation's economy going again, voted to maintain its own stimulus plan overnight. The Bank of England also maintained its key rate and stimulus unchanged.

Gold for February delivery, the most actively traded contract, dipped $0.50 to settle at $1,293.70 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for February delivery scaled an intraday high of $1,307.00 and a low of $1,284.60 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to 742.24 tons on Wednesday from its previous close of 730.89 on Tuesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 93.03 on Wednesday, up from its previous close of 93.00 late Tuesday in North American trade. The dollar scaled a high of 93.09 intraday and a low of 92.15.

The euro trended higher against the dollar at $1.1571 on Wednesday, as compared to its previous close of $1.1551 late Tuesday in North American trade. The euro scaled a high of $1.1674 intraday and a low of $1.1542.

On the economic front, new residential construction in the U.S. saw a significant increase in December with housing starts nearly offsetting the drop seen in the previous month, a report from the Commerce Department showed Wednesday,.

The report said housing starts jumped 4.4 percent to an annual rate of 1.089 million in December after tumbling 4.5 percent to a revised 1.043 million in November. Economists expected housing starts to climb 1.3 percent to 1.041 million in December from the 1.028 million originally reported for the previous month.

Meanwhile, the report also said building permits fell 1.9 percent to an annual rate of 1.032 million in December from the revised November rate of 1.052 million. Building permits, an indicator of future housing demand, had been expected to climb 2.4 percent to 1.060 million from the 1.035 million originally reported for the previous month.

The U.K. unemployment rate fell to a six-year low in the September to November period but the fall in unemployment was the slowest since September 2013, data from the Office for National Statistics showed Wednesday.

The jobless rate in U.K. dropped to 5.8 percent during the September to November period from 6 percent in the June to August period. Economists had forecast a rate of 5.9 percent. This was the lowest rate since August 2008.

The leading index for Germany increased in November, figures from the Conference Board showed Wednesday. The leading index rose 0.4 percent month-over-month in November, reversing the 0.1 percent decline in October.

The Bank of England's rate-setting body unanimously decided to leave the key rate unchanged for the first time since August after two policymakers abandoned their call for a rate hike. The Monetary Policy Committee voted 9-0 to retain the base rate at 0.50 percent, the minutes showed Wednesday. All members were also in favor of maintaining the size of quantitative easing at GBP 375 billion.

Eurozone house prices increased for the second straight quarter in the three months to September 2014, preliminary data from Eurostat showed Wednesday. House prices rose 0.6 percent quarter-on-quarter, slower than a 0.9 percent increase in the previous three months. House prices in the EU grew 1.1 percent in the third quarter from the previous three months and rose 2.3 percent from the corresponding period of the previous year.

Meanwhile, the Bank of Japan also kept its monetary policy unchanged and lowered its near-term inflation forecast as falling oil prices hamper efforts to lift inflation. The bank voted to maintain its monetary base at an annual pace of about JPY 80 trillion.