Gold Ends Higher On Soft Retail Data

(RTTNews) - Gold futures ended higher for a second straight session on Wednesday, after some disappointing U.S. retail sales data for July with China's industrial production also growing at a slower pace in July.

The soft retail sales data also discounted any possiblity of an earlier than expected move by the U.S. Federal Reserve to hike rates.

Investors were also focused on the developments in Ukraine, with a convoy of 260 Russian trucks carrying humanitarian aid headed for Ukraine, which is likely to be denied entry by the Ukrainian government.

Meanwhile, the developments in Gaza were also being closely watched, even as the three-day truce in the Gaza Strip ends later today.

Gold for December delivery, the most actively traded contract, added $3.90 or 0.3 percent to close at $1,314.50 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for December delivery scaled an intraday high of $1,316.40 and a low of $1,306.00 an ounce.

On Tuesday, gold futures ended a tad higher with weakness in European equity markets on the back of some soft German economic data contributing to some slackness.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 795.86 tons on Wednesday from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.60 on Wednesday, up from its previous close of 81.51 late Tuesday in North American trade. The dollar scaled a high of 81.68 intraday and a low of 81.36.

The euro traded lower against the dollar at $1.3369 on Wednesday, as compared to its previous close of $1.3369 late Tuesday in North American trade. The euro scaled a high of $1.3415 intraday and a low of $1.3344.

In economic news from the U.S., a report from the Commerce Department showed retail sales were virtually unchanged in July, after edging up by 0.2 percent in June. Economists expected another 0.2 percent increase in sales. Excluding a modest drop in auto sales, retail sales inched up by 0.1 percent in July compared to a 0.4 percent increase in the previous month.

A report from the U.S. Commerce Department showed business inventories to have increased 0.4 percent in June, following a 0.5 percent increase in May, in line with economists' estimates.

The Bank of England has downgraded its wage growth estimate and said that any interest rate hike will be only gradual. With inflation likely to remain close to the 2 percent target, interest rate may well stay at historically low levels for sometime.

In Asia, Chinese industrial production in July grew at a slower pace of 9 percent from a year ago. Retail sales too saw a slower growth, rising 12.2 percent in July, after increasing by 12.4 percent in the preceding month.