Gold Ends Lower On Strong Dollar, Upbeat Data

(RTTNews) - Gold futures snapped a three-day gain to end lower on Thursday, with the dollar trending higher against some major currencies after an upbeat U.S. retail sales data in May, sparking speculations of an interest rate hike by the Federal Reserve later this year.

Earlier in the day, gold made modest gains after news reports said the International Monetary Fund and Greece have abruptly ended their talks on the beleaguered country's financial debt problems, citing lack of progress.

Gold prices were unable to sustain the modest gains made in the last few days with the dollar firming against the euro. A lack of clarity on interest from the Federal Reserve has kept gold prices locked in a narrow range near 11-week lows for the past few weeks.

In economic news, U.S. retail sales jumped 1.2 percent in May, a welcome sign for those betting the U.S. economy would come back from a rough winter. However, first-time claims for U.S. unemployment benefits increased more than expected last week after reporting a modest decrease in in the previous week, a Labor Department report said Thursday.

Gold for August delivery, the most actively traded contract, dropped $6.20 or 0.5 percent to settle at $1,180.40 an ounce, on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for August delivery scaled an intraday high of $1,187.40 and a low of $1,174.80 an ounce.

On Wednesday, gold prices gained $9.00 or 0.8 percent to settle at $1,186.60 an ounce, as investors opted for the safe haven appeal of the precious metal with the dollar weakening and focus on the developments in Europe over Greece's financial debt woes.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 704.22 tons from its previous close of 705.72 tons on Wednesday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.19 on Thursday, up from its previous close of 94.61 on Wednesday in late North American trade. The dollar scaled a high of 95.60 intraday and a low of 94.71.

The euro trended lower against the dollar at $1.1235 on Thursday, as compared to its previous close of $1.1324 in North American trade late Wednesday. The euro scaled a high of $1.1329 intraday and a low of $1.1185.

On the economic front, retail sales in the U.S. showed a notable increase in the month of May, according to a report released by the Commerce Department on Thursday. The Commerce Department said retail sales jumped by 1.2 percent in May, matching economists' consensus estimate.

After reporting a modest decrease in first-time claims for U.S. unemployment benefits in the previous week, the Labor Department released a report on Thursday showing a slight uptick in clams in the week ended June 6. Initial jobless claims inched up to 279,000, an increase of 2,000 from the previous week's revised level of 277,000. Economists had expected jobless claims to edge down to 275,000 from the 276,000 originally reported for the previous week.

China's industrial production and retail sales growth improved in May as recent measures taken to boost bank lending penetrate into economic activity. Industrial production grew 6.1 percent year-over-year in May, following a 5.9 percent gain in April, figures from the National Bureau of Statistics showed Thursday. Economists had expected a 6.0 percent increase for the month.

In another report, the NBS said retail sales in China surged 10.1 percent in May. This is in line with expectations, but slightly faster than previous month's 10.0 percent expansion. In March, sales had risen 10.2 percent.

French consumer prices increased for the second straight month in May, in line with expectations, figures from the statistical office Insee showed Thursday. The consumer price index rose 0.3 percent year-over-year in May, faster than previous month's 0.1 percent increase. The figure was also matched with consensus estimate.

France's non-farm payroll employment remained virtually stable in the first quarter after rising in the previous quarter, preliminary data released by statistical office INSEE showed Thursday. Payroll employment in the principally market sectors, which include the manufacturing, construction and services sectors, remained stable quarter-on-quarter, following the 0.1 percent rise in the previous quarter.

With prices for fuel imports showing a substantial increase, the Labor Department released a report on Thursday showing that U.S. import prices rose by more than expected in May.

The report said import prices surged up by 1.3 percent in May following a revised 0.2 percent decrease in April. Economists had expected import prices to climb by about 0.8 percent.

The Labor Department also said export prices rose by 0.6 percent in May after falling by 0.7 percent in April. Export prices had been expected to inch up by 0.2 percent.

Partly reflecting a notable increase in retail inventories, the Commerce Department released a report on Thursday showing that U.S. business inventories rose by more than expected in April. The Commerce Department said business inventories increased by 0.4 percent in April following a 0.1 percent uptick in March. Economists had expected inventories to edge up by 0.2 percent.