Gold Ends Below $1,150 On Yellen Statement, Upbeat U.S. Data

(RTTNews) - Gold futures slipped for a fifth straight session to end at an eight-month low on Wednesday, after some upbeat economic data from the U.S. and on indications from Federal Reserve Chief Janet Yellen of a likely interest-rate hike this year.

Federal Reserve Chairman Janet Yellen gave a relatively upbeat assessment of the U.S economy Wednesday morning in semiannual testimony before Congress. With the economy expected to pick up in the coming months, Yellen thinks the Fed will raise interest rates by the end of the year.

Gold prices were also under pressure as markets continued to weigh a busy week of geopolitical developments.

A nuclear deal between Iran and the West overshadowed a third rescue package for Greece over the weekend. Neither deal is set in stone however, leaving some uncertainty about future events.

In some upbeat economic news, U.S. producer prices rose slightly more than expected in June, with energy prices showing another significant increase.

Meanwhile, industrial production in the U.S. rose slightly more than expected in June, a Federal Reserve report showed Wednesday, with the increase reflecting jumps in mining and utilities output. As well, business conditions for New York manufacturers improved slightly in July, a report from the Federal Reserve Bank of New York on Wednesday.

Gold for August delivery, the most actively traded contract, fell $6.10 or 0.5 percent, to settle at $1,147.40 an ounce, on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for August delivery scaled an intraday high of $1,155.80 and a low of $1,141.90 an ounce.

On Tuesday, gold prices dropped $1.90 or 0.2 percent, to settle at $1,153.50 an ounce, after Iran reached a deal with Western powers to limit its nuclear program, in exchange for lifting sanctions against it.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 709.07 tons on Wednesday, from its previous close of 707.58 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.17 on Wednesday, up from its previous close of 96.61 on Tuesday in late North American trade. The dollar scaled a high of 97.31 intraday and a low of 96.53.

The euro trended lower against the dollar at $1.0950 on Wednesday, as compared to its previous close of $1.1008 in North American trade late Tuesday. The euro scaled a high of $1.1037 intraday and a low of $1.0931.

On the economic front, a Labor Department report on Wednesday showed U.S. producer prices to have risen slightly more than expected in June, with the index rising 0.4 percent following a 0.5 percent increase in May. Economists expected prices to climb by 0.3 percent in June.

Industrial production in the U.S. rose slightly more than expected in June, the Federal Reserve revealed in a report on Wednesday, with the increase reflecting jumps in mining and utilities output. Industrial production increased 0.3 percent in June after edging down 0.2 percent in May. Economists expected production to rise by 0.2 percent.

Business conditions for New York manufacturers have improved slightly in July, a report from the Federal Reserve Bank of New York said Wednesday. The general business conditions index climbed to a positive 3.9 in July from a negative 2.0 in June, with a positive reading indicating growth in regional manufacturing activity. The index was expected to rise to a positive 3.0.

China's second quarter economic growth exceeded expectations, helped by stimulus, suggesting that the government remains on track to achieve its target this year. Gross domestic product grew 7 percent year-over-year in the second quarter, the same rate of growth as seen in the first quarter, the National Bureau of Statistics reported Wednesday. The rate was faster than the 6.8 percent rise forecast by economists.

French consumer price inflation held steady in June, in line with consensus estimate, figures from the statistical office Insee showed Wednesday. The consumer price index rose 0.3 percent year-over-year in June, the same rate of increase as in May. The figures was also matched with economists' expectations. It was the third successive monthly rise.

U.K. jobless claims increased unexpectedly in June, data from the Office for National Statistics revealed Wednesday. The number of people claiming job-seeker's allowance increased by 7,000 in June from May, confounding expectations for a decline of 9,000. This was the first increase since October 2012. At the same time, the claimant count rate held steady at 2.3 percent in June as expected by economists.

U.K. unemployment increased and employment declined in the three months to May, data from the Office for National Statistics revealed Wednesday. At the same time, wages grew at the fastest pace in more than five years.

During the March to May period, the jobless rate in the U.K. calculated based on the ILO standards came in at 5.6 percent. The rate was forecast to be at 5.5 percent, the same as logged in the three months to April, which was also the lowest since April-June 2008. However, the jobless rate was well below the 6.5 percent seen a year earlier, the statistical office said.