Gold Ends Lower On Forecast, Fed

(RTTNews) - Gold futures ended lower for a second straight session Wednesday, on continued uncertainty over the U.S. Federal Reserve's next move on further tapering down its quantitative easing program and with Morgan Stanley lowering its forecast for gold. The absence of any major economic releases also impacted gold futures.

The precious metal slid after Morgan Stanley lowered its 2014 outlook for gold by 11.6% to $1,160 an ounce and by 12.5% to $1,138 an ounce for 2015. The bank attributed the cut to resurgent equity markets and possible regulatory pressures.

Gold for February delivery, the most actively traded contract, slipped $3.20 or 0.3 percent to close at $1,238.60 an ounce on the Comex division of the New York Mercantile Exchange on Wednesday.

Gold for February delivery scaled an intraday high of $1,243.50 and a low of $1,237.40 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 797.05 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.16 on Wednesday, up from its previous close of 81.09 late Tuesday in North American trade. The dollar scaled a high of 81.21 intraday and a low of 80.96.

The euro traded lower against the dollar at $1.3549 on Wednesday, as compared to its previous close of $1.3561 late Tuesday in North America. The euro scaled a high of $1.3582 intraday and a low of $1.3536.

In economic news, unemployment rate in the U.K. fell rapidly to the level close to the central bank's 7 percent threshold for an interest rate hike. Nonetheless, policymakers of the Bank of England said there was no immediate need to raise interest rates, even if the threshold is reached. The jobless rate dropped to 7.1 percent for the September to November period, just above the BoE's threshold, data from the Office for National Statistics showed Tuesday. The rate was below the 7.3 percent forecast by economists and the 7.7 percent posted during the June-August quarter. This was also the lowest rate ever recorded since the December to February period of 2009.

Meanwhile, the gross debt of Eurozone governments narrowed in the third quarter, marking the first decline in nearly six years, data from Eurostat revealed Wednesday. Total government debt in the bloc dropped to 92.7 percent of gross domestic product (GDP) at the end of September quarter from 93.4 percent in the second quarter. It was the first decline since the fourth quarter of 2007.

The Bank of Japan on Wednesday kept its monetary easing plan unchanged and retained its inflation forecast for the next two years, strengthening expectations that the central bank may keep the policy steady at least for now, with consumer prices evolving in line with its forecasts. The Japanese central bank will keep the target of the monetary base expansion at an annual pace of JPY 60-70 trillion.