Gold Ends Lower On Global Cues, Fed Meet

(RTTNews) - Gold futures ended lower for a fourth straight session on Friday, tracking sharply declining global equity markets with investors focused on the U.S. Federal Reserve's monetary policy due Wednesday. Markets expect the Fed to provide some clues regarding timing of interest rate hikes at the conclusion of its monetary policy meet later this week.

A firm trend in European stock markets and concerns about a slowdown in China as well as worries over the economic situation in eurozone also weighed on the yellow metal.

Investors also continued to mull over the global economic scenario with signs of slowdown in China and a sluggish eurozone economy, even as observers see a Greece crisis in the making after Prime Minister Antonis Samaras decided to bring forward the crucial presidential elections.

Some upbeat economic news also did little to support gold with U.S. industrial production climbing more than expected in November, recording its strongest growth in about 3 and a half years, as factory output and production at utilities surged, a Federal Reserve report showed Monday. Meanwhile, industrial production in the U.S. also jumped more than expected in November.

However, manufacturing activity in New York State unexpectedly shrunk in December, marking the first decline in nearly 2 years.

Gold for February delivery, the most actively traded contract, dropped $14.80 or 1.2 percent to settle at $1,207.70 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

Gold for February delivery scaled an intraday high of $1,225.00 and a low of $1,205.10 an ounce.

On Friday, gold futures ended at $1,222.50 an ounce, down $3.10 or 0.3 percent, weighed down by some upbeat economic data from the U.S., including a report from Reuters and the University of Michigan that showed consumer sentiment index to have risen more than expected in December. However, a weak greenback and lower global equity markets limited the bullion's downside.

Despite posting losses for three straight sessions, gold gained about 2.7 percent last week.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 725.75 tons on Monday, from its previous close on Friday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 88.44 on Monday, up from its previous close of 88.19 late Friday in North American trade. The dollar scaled a high of 88.63 intraday and a low of 88.17.

The euro trended lower against the dollar at $1.2440 on Monday, as compared to its previous close of $1.2464 late Friday in North American trade. The euro scaled a high of $1.2479 intraday and a low of $1.2416.

In economic news from the U.S., the New York Federal Reserve's Empire State manufacturing index came in at negative 3.6 for December, down sharply from November's reading of 10.2. Economists expected the figure to rise to positive 12.0.

In economic news from the U.S., industrial production, a measure of output at the factories, mines and utilities, rose 1.3 percent in November, significantly higher than the growth rate of 0.1 percent in October. Economists expected production to rise 0.7 percent for the month.

U.S. Industrial production in November was up 5.2 percent compared to the same period last year.

A closely-watched measure of confidence among U.S. home builders ticked down in December by one point to 57, but was still close to the nine-year high reached in September, data from the National Association of Home Builders/Wells Fargo showed Monday. Economists expected the gauge at 59 in December from 58 recorded in November. The nine-year high score in September was 59.

Besides the crucial Fed monetary policy, other important economic events this week are the manufacturing surveys by the New York Federal Reserve and updated FOMC forecasts, as well as the Fed Chair's press briefing, both due on Wednesday.

Data on consumer price inflation, third quarter current account data, the Conference Board's leading economic indicators index for November and Kansas City Federal Reserve's regional manufacturing survey for December are also due this week.