Gold Ends Lower On U.S. Economic Data

(RTTNews) - Gold futures snapped a three-day gain to end lower on Friday, after some mixed economic data out of the U.S. with industrial production increasing more than expected in July, although consumer sentiment deteriorated more than anticipated.

Investors have also been getting mixed signals from the Federal Reserve on interest rates. St. Louis President James Bullard said Thursday he would still like to see the central bank raise interest rates for the first time this cycle in March 2015.

In some upbeat economic news, a U.S. Federal Reserve report on Friday showed industrial production to have increased slightly more than expected in July, due mainly to a jump in manufacturing output which more than offset a sharp drop in utilities output. However, a Thomson Reuters and the University of Michigan report on Friday showed consumer sentiment in the U.S. unexpectedly deteriorated in August.

Meanwhile, a Federal Reserve Bank of New York report showed business conditions for New York manufacturers continued to improve in August, althout the improvement was less widespread than in the previous month.

Gold for December delivery, the most actively traded contract, shed $9.50 or 0.7 percent to close at $1,306.20 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,316.50 and a low of $1,293.00 an ounce.

On Thursday, gold futures rallied to end higher on some disappointing economic data from the U.S. with first-time claims for unemployment benefits rising more than expected last week.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 795.60 tons on Friday from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.46 on Friday, down from its previous close of 81.62 late Thursday in North American trade. The dollar scaled a high of 81.62 intraday and a low of 81.38.

The euro traded higher against the dollar at $1.3393 on Friday, as compared to its previous close of $1.3365 late Thursday in North American trade. The euro scaled a high of $1.3411 intraday and a low of $1.3359.

In economic news from the U.S., a Federal Reserve report showed industrial production to have risen by 0.4 percent in July, matching the upwardly revised increase reported for June. Economists expected production to rise by 0.3 percent compared to the 0.2 percent uptick originally reported for the previous month.

The bigger than expected increase in production was largely due to the jump in manufacturing output, which surged 1.0 percent in July after climbing by an upwardly revised 0.3 percent in June.

A preliminary report from Thomson Reuters and the University of Michigan on Friday showed U.S. consumer sentiment index for August dropped to 79.2 compared to the final July reading of 81.8. Economists expected the consumer sentiment index to inch up to a reading of 82.3.

The New York Fed said its general business conditions index dropped to 14.7 in August from 25.6 in July, although a positive reading continues to indicate an increase in regional manufacturing activity. The index has been expected to dip to a reading of 20.0. The bigger than expected pullback by the general business conditions index after having reached a four-year high in the previous month.

The U.S. Labor Department said its producer price index for final demand inched up by 0.1 percent in July after climbing 0.4 percent in June. The modest increase was in line with economists' estimates.

Higher food prices contributed to the modest increase by the producer price index, as food prices rose by 0.4 percent in July after falling by 0.2 percent in each of the two previous months.