Gold Ends Slightly Higher On Economic Data

(RTTNews) - Gold futures snapped a three-day loss to end higher on Wednesday, on some upbeat economic data from China with the country's gross domestic product rising more than expected in the second quarter and U.S. producer price inflation rising more than expected.

Meanwhile, U.S. Federal Reserve Chair Janet Yellen continued her testimony before the House Financial Services Committee, rejecting a GOP bill that would require the Fed to follow a mathematical rule for when to raise or lower interest rates. Yellen said it would be a "grave mistake" for Fed to commit to follow a rigid metric.

On Tuesday, Yellen indicated the Fed may raise interest rates sooner than expected if the recovery in the U.S. labor market is sustained.

The Federal Reserve's Beige Book report showed economic activity improved along with the labor market across the United States. The Beige Book, a collection of anecdotal data on the condition of the U.S. economy, showed all twelve of the U.S. Fed districts recorded growth since June. Only two districts, Boston and Richmond, reported a slightly slower pace of growth during that time.

In economic news, a Labor Department report showed U.S. producer prices to have increased more than expected in June, with energy prices registering a significant rebound. Meanwhile, China's GDP growth for the second quarter at 7.5 percent was faster than that forecast by economists.

Gold for August delivery, the most actively traded contract, added $2.70 or 0.2 percent to close at $1,299.60 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday. On Tuesday, gold futures had declined to its lowest level since June 19.

Gold for August delivery scaled an intraday high of $1,304.20 and a low of $1,293.50 an ounce.

On Tuesday, gold futures dropped on some mixed economic data from the U.S. and remarks from U.S. Federal Reserve Chair Janet Yellen on rate hikes.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 808.73 tons on Wednesday, from its previous close of 800.05 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.55 on Wednesday, up from its previous close of 80.38 late Tuesday in North American trade. The dollar scaled a high of 80.58 intraday and a low of 80.38.

The euro traded lower against the dollar at $1.3523 on Wednesday, as compared to its previous close of $1.3569 late Tuesday in North American trade. The euro scaled a high of $1.3630 intraday and a low of $1.3562.

In economic news, a report from the U.S. Federal Reserve showed industrial production to have risen by a less than expected 0.2 percent in June, compared to economist estimates for a 0.4 percent increase.

Data from the U.S. Labor Department showed producer prices to have risen 0.4 percent in June, due largely due to a rebound in energy prices, following a 0.2 percent drop in May. Economists expected June prices to increase by about 0.2 percent.

A National Association of Home Builders report on Wednesday showed homebuilder confidence in the U.S. to have improved more than anticipated in July, with the NAHB/Wells Fargo Housing Market Index climbing to 53 in July from 49 in June. Economists expected a more modest increase to a reading of 50. This is the first time builder confidence has been above 50 since January this year.

According to a report from China's National Bureau of Statistics, gross domestic product expanded 7.5 percent on year in the second quarter of 2014, beating forecasts for a 7.4 percent increase. On a seasonally adjusted quarterly basis, GDP gained an annualized 2.0 percent - also beating expectations for 1.8 percent and accelerating from 1.4 percent in the first quarter.

Meanwhile, China's housing sales declined in the first half of 2014, data from the National Bureau of Statistics showed Wednesday, with home sales down 9.2 percent to CNY 2.56 trillion, from last year. Meanwhile, property investment surged about 14 percent to CNY 4.2 trillion.