20th May 2014 18:08
WASHINGTON (Alliance News) - Gold futures ended slightly higher Tuesday, on lingering concerns over the ongoing unrest in Ukraine and subdued global equity markets, amid reports of a notable drop in gold demand from China last quarter.
A report from the World Gold Council on Tuesday showed China's demand for gold in the first quarter dropped 18%, even as global demand for bars and coins fell 39% to 283 tonnes in the first three months of the year.
Gold for June delivery, the most actively traded contract, gained USD0.80 or 0.1% to close at USD1,294.60 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
Gold for June delivery scaled an intraday high of USD1,297.20 and a low of USD1,286.00 an ounce.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 781.98 tons on Tuesday, from its previous close.
The dollar index, which tracks the US unit against six major currencies, traded at 80.06 on Tuesday, up from its previous close of 80.02 late Monday in North American trade. The dollar scaled a high of 80.13 intraday and a low of 80.00.
The euro traded lower against the dollar at USD1.3693 on Tuesday, as compared to its previous close of USD1.3709 late Monday in North America. The euro scaled a high of USD1.3713 intraday and a low of USD1.3678.
In economic news, gross domestic product for the Organization for Economic Cooperation and Development countries grew at a slower pace in the first quarter, with the provisional estimates showing the real quarter-on-quarter growth to have slowed to 0.4%, from 0.5% in the fourth quarter of 2013.
From Europe, UK inflation accelerated more-than-expected on higher transport costs in April, while factory gate inflation continued to remain subdued signaling weak inflationary pressure in the pipeline. Consumer price inflation rose to 1.8% from 1.6% in March, which was the lowest since October 2009, the Office for National Statistics said Tuesday. This was the first time since June 2013 that the annual rate increased and also exceeded economists' consensus of 1.7%. But it has remained below the 2% target since January.
Meanwhile, Charles Plosser, president of the Philadelphia Fed. Believes the Federal Reserve may raise interest rates sooner than expected if the US economy continues to speed up after the winter lull. He predicts the recovery will pick up in the second of 2014 and into next year, prompting the Fed to "begin raising interest rates sooner rather than later."
Plosser sees unemployment dwindling below 5.9% by the end of this year. Despite some recent weakness in the housing market, the US economy "is on the firmest footing it has been on since the recovery began," said Plosser.
Investors also await the minutes of the US Federal Reserve's monetary policy meeting, due Wednesday.
Copyright RTT News/dpa-AFX