Gold Ends Higher Ahead Of Fed Policy Meet Outcome

(RTTNews) - Gold futures settled higher for a third straight session Wednesday, with the dollar weakening against a basket of major currencies ahead of the U.S. Federal Open Market Committee policy meet outcome later today, and comments from the Federal Reserve Chairman Ben Bernanke thereafter. Investors also weighed some disappointing inflation data from China yesterday and rising oil prices, making gold an attractive option.

Gold for August delivery, the most actively traded contract, gained $1.50 or 0.1 percent to close at $1,247.40 an ounce Wednesday on the Comex division of the New York Mercantile Exchange.

Gold for August delivery scaled an intraday high of $1,260.80 and a low of $1,242.20 an ounce.

Yesterday, gold settled higher mostly on bargain hunting with some disappointing inflation data out of China, even as the dollar strengthened against some major currencies.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped to 939.75 tons from 946.96 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.16 on Wednesday, down from 84.64 late Tuesday in North American trade. The dollar scaled a high of 84.73 intraday and a low of 84.11.

The euro traded higher against the dollar at $1.2853 on Wednesday, as compared to $1.2781 late Tuesday in North America. The euro scaled a high of $1.2862 intraday and a low of $1.2766.

In economic news from the U.S., the Commerce Department said wholesale inventories fell by 0.5 percent in May following a revised 0.1 percent decrease in April. The drop surprised economists, who had been expecting inventories to rise by 0.3 percent compared to the 0.2 percent increase originally reported for the previous month.

From the eurozone, Germany's EU harmonized inflation accelerated in June as initially estimated, final data released by the Federal Statistical Office showed. Inflation as per the harmonized index of consumer prices increased to 1.9 percent in June from 1.6 percent in May. The outcome matched the preliminary estimates.

Elsewhere, China posted a merchandise trade surplus of $27.1 billion in June, but were below economists' forecast of a surplus $27.8 billion. Exports were down 3.1 percent from a year ago, below estimates for an increase of 3.7 percent. Imports dipped an annual 0.7 percent compared to forecast of a 6 percent jump.