Gold Ends Sharply Higher Ahead Of ECB Meet; Greece In Focus

(RTTNews) - Gold futures ended higher for a seventh straight session on Tuesday, surging to a five-month high, amid mounting speculation that the European Central Bank will embark on a full-scale quantitative easing at its meeting later this week.

With the ECB expected to print money on Thursday amid uncertainty over the future of Greece in the eurozone, gold's safe haven premium has driven bullion prices sharply higher in 2015.

Markets remained cautious after the International Monetary Fund slashed its global growth outlook. The IMF has projected global growth at 3.5 percent for 2015 and 3.7 percent for 2016, in its latest World Economic Outlook report, down by 0.3 percentage points from earlier estimates.

Meanwhile, the Chinese economy grew at the weakest pace since early 2009 in the fourth quarter, though the growth was more than the consensus estimate, data from the National Bureau of Statistics showed.

Gold for February delivery, the most actively traded contract, jumped $17.30 or 1.4 percent to settle at $1,294.20 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

Gold for February delivery scaled an intraday high of $1,297.20 and a low of $1,272.10 an ounce.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to 730.89 tons from its previous close of 717.15 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 93.03 on Tuesday, up from its previous close of 92.61 late Monday in North American trade. The dollar scaled a high of 93.05 intraday and a low of 92.55.

The euro trended lower against the dollar at $1.1544 on Tuesday, as compared to its previous close of $1.1608 late Monday in North American trade. The euro scaled a high of $1.1620 intraday and a low of $1.1543.

In economic news, homebuilder confidence in the U.S. showed a modest deterioration in January, a report from the National Association of Home Builders revealed Tuesday. The NAHB/Wells Fargo Housing Market Index edged down to 57 in January from an upwardly revised 58 in December. Economist expected the index at 58 from the 57 originally reported for the previous month.

Falling oil prices and weak euro boosted German economic confidence to an 11-month high in January, a survey by the ZEW Centre for European Economic Research showed Tuesday. The indicator of economic sentiment rose sharply to 48.4 in January from 34.9 in December, the Mannheim-based institute said. The reading was forecast to rise to 40. This was the third consecutive rise in the index and marked the highest score since February 2014, when the reading was at 55.7.

Elsewhere in Europe, the average asking price for a house in the United Kingdom was up 1.4 percent on month in January, property tracking website Rightmove said on Monday. This follows the upwardly revised 2.2 percent contraction in December (originally -3.3 percent).

From Asia, The Chinese economy grew at the weakest pace since early 2009, with its Gross domestic product, or GDP, rising 7.3 percent in the fourth quarter from a year ago, the same rate as in the third quarter. This was the weakest growth since the first quarter of 2009. However, the growth was stronger than the 7.2 percent rise forecast by economists.

China's housing sales declined in 2014, but signaled positive signs in the last few months as market sentiment was boosted by an interest rate cut by the central bank in November. New home sales dropped 7.8 percent in the whole year 2014 to 6.24 trillion yuan, reports said Tuesday citing data from the National Bureau of Statistics. In the first eleven months, home sales slid 9.7 percent from the same period a year ago. In December, home sales climbed 4.2 percent from a year earlier to 938.4 billion yuan.

Chinese retail sales rose 11.9 percent year-over-year in December following the 11.7 percent rise in November, data from the National Bureau of Statistics showed Tuesday. Economists expected sales to increase at the stable rate of 11.7 percent.

China's industrial production rose 7.9 percent year-over-year in December following the 7.2 percent growth in November. Economists expected production to rise 7.4 percent.