Gold Ends Lower On Global Cues

(RTTNews) - Gold futures snapped a two-day gain to end lower on Friday, after trading higher for much of the day on news that President Barack Obama authorized a limited airstrike on militants in Iraq. Investors tracked rising U.S. equity markets after some mixed economic data with U.S. wholesale inventories rising less than expected in June.

Global equity markets ended mostly in the red yesterday, on developments over Ukraine with Russia taking an aggressive stand, banning the import of agricultural produce from the U.S. and the European Union. The U.S. and the European Union had imposed additional sanctions on Russia for its alleged involvement in supporting separatists in eastern Ukraine.

Gold futures had been trading higher amid reluctance by major central banks to signal their next moves. In the U.S., the Federal Reserve provided no clarity as to when it would begin tightening rates, while in Europe the European Central Bank this week resisted calls to offer further stimulus to aid the region's ailing economy.

Nonetheless, investors continued to seek the save haven of the yellow metal amid concerns over the situation in Iraq and Ukraine.

On Thursday, in a bid to thwart the advancing Islamic militants, the U.S. President Barack Obama authorized airstrikes in Iraq.

In economic news, wholesale inventories in the U.S. rose by less than expected in June, even as wholesale sales indicated only a modest increase, a report from the Commerce Department showed Friday. Meanwhile, labor productivity in the U.S. increased more than anticipated in the second quarter, with the jump in contributing to a smaller than expected increase in labor costs.

Chinese exports rose notably more than expected in July on strong foreign demand but weak domestic consumption dragged imports, taking the trade surplus to a record high.

Gold for December delivery, the most actively traded contract, dipped $1.50 or 0.1 percent to close at $1,311.00 an ounce on the Comex division of the New York Mercantile Exchange on Friday.

Gold for December delivery scaled an intraday high of $1,324.30 and a low of $1,305.70 an ounce.

On Thursday, gold futures ended higher as investors sought the safe haven of the precious metal while staying away from risky equity assets as most global markets ended in the red on developments over Ukraine.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 797.65 tons on Friday from its previous close of 800.05 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 81.36 on Friday, down from its previous close of 81.43 late Thursday in North American trade. The dollar scaled a high of 81.60 intraday and a low of 81.26.

The euro traded higher against the dollar at $1.3415 on Thursday, as compared to its previous close of $1.3364 late Thursday in North American trade. The euro scaled a high of $1.3432 intraday and a low of $1.3344.

In economic news from the U.S., labor productivity rose by a more than anticipated 2.5 percent in the second quarter, data released by the Labor Department showed. Economists had expected an increase of 1.5 percent.

Unit labor costs were up 0.6 percent in the second quarter, notably lower than expectations for a 1.4 percent growth.

Wholesale inventories in the U.S. climbed by 0.3 percent in June, matching the downwardly revised increase seen in May. Economists had been expecting inventories to increase by about 0.6 percent compared to the 0.5 percent growth originally reported for the previous month.

The weaker than expected growth came as a 0.7 percent increase in inventories of durable goods was partly offset by a 0.2 percent drop in inventories of non-durable goods.

Wholesale sales in the U.S. inched up by just 0.2 percent in June following a 0.7 percent increase in May.

China's exports grew 14.5 percent year-on-year in July, more than double the 7.2 percent increase seen in June, the General Administration of Custom showed Friday. Shipments were expected to increase 7 percent. Meanwhile, imports declined 1.6 percent, reversing the 5.5 percent increase in June and confounded expectations for a 2.6 percent rise.

The Bank of Japan unanimously decided to maintain status quo position with respect to its monetary policy, the central bank stated on Friday after its two-day monetary policy meet. The central bank said it will continue to increase the monetary base at an annual pace of about JPY 60 trillion to JPY 70 trillion.