Gold Ends Sharply Lower, Sheds 3.1% For Month

(RTTNews) - Gold futures ended sharply lower on Thursday, on some disappointing data from the U.S. with initial claims for unemployment benefits rising more than expected last week. With the U.S. gross domestic product growing more than expected in the second quarter, gold found little support as a safe haven, even as global equity markets slumped.

Gold futures dropped about 3.1 percent in July.

Investors also mulled over the prospects of the U.S. Federal reserve hiking interest rates to fight inflation with the economy improving.

In economic news, a Labor Department report showed first-time claims for U.S. unemployment benefits rebounded in the week ended July 26, with initial jobless claims bouncing off the fourteen-year low seen in the previous week.

A report from MNI Indicators on Thursday showed Chicago-area business activity unexpectedly grew at a substantially slower rate in July, with the business barometer falling to its lowest level in a year.

Gold prices were also weighed down after U.S. GDP grew 4.0 percent in the second quarter following a revised 2.1 percent decrease in the first quarter.

Gold for December delivery, the most actively traded contract, shed $13.60 or 1.1 percent to close at $1,281.30 an ounce on the Comex division of the New York Mercantile Exchange on Thursday.

Gold for December delivery scaled an intraday high of $1,298.80 and a low of $1,281900 an ounce.

On Wednesday, gold futures ended lower, on some upbeat U.S. economic data with the country's gross domestic product growing more than expected in the second quarter.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 801.84 from its previous close on Thursday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.45 on Thursday, up from its previous close of 81.40 late Tuesday in North American trade. The dollar scaled a high of 81.57 intraday and a low of 80.38.

The euro traded lower against the dollar at $1.3389 on Thursday, as compared to its previous close of $1.3401 late Wednesday in North American trade. The euro scaled a high of $1.3401 intraday and a low of $1.3372.

In economic news from the U.S., a report from the Labor Department said first-time claims for U.S. unemployment benefits climbed to 302,000, an increase of 23,000 from the previous week's revised level of 279,000. Economists expected jobless claims to rise to 301,000 from the 284,000 originally reported for the previous week.

Meanwhile, MNI Indicators said the Chicago business barometer tumbled to a reading of 52.6 in July after dipping to 62.6 in June. While a reading above 50 indicates continued growth in Chicago-area business activity, economists had expected the index to inch back up to 63.0.

Eurozone inflation slowed to the lowest level in four-and-a-half years in July, even after the European Central Bank cut the interest rates to historic lows, necessitating more action to elude the risk of deflation. Euro area inflation slowed to 0.4 percent in July from 0.5 percent in June, flash estimate from Eurostat revealed today. The figure was expected to remain unchanged at 0.5 percent.

The unemployment rate in the 18-nation bloc declined unexpectedly in June to the lowest since September 2012 from a record high seen at the end of last year as labor market conditions improved notably in Germany and Spain. Meanwhile, the signs of improvement in Italy was dampened by the youth joblessness hitting a record.