Overall strength in dollar affects prices
Bullion prices lost more than 2% on Tuesday, 15 April 2014. Gold futures dropped just over 2% on Tuesday, with traders attributing the decline to profit-taking on the back of overall strength in the dollar after the prior session's close at a three-week high for the metal. Silver prices took hits on concerns over China's economic growth.
Gold for June delivery dropped $27.20, or 2.1%, to settle at $1,300.30 an ounce on the Comex division of the New York Mercantile Exchange, erasing an $8.50 gain from Monday, when prices closed at a three-week high.
Silver for May delivery sank 52 cents, or 2.6%, to end at $19.49 an ounce.
For now, overall strength in the U.S. dollar put pressure on dollar-denominated metals prices. The dollar index trades higher so far for the week, following an advance on Monday after better-than-expected U.S. retail sales.
The dollar index traded higher by 0.1% on Tuesday.
Among economic data expected for the day at Wall Street, consumer prices increased 0.2% in March, up from a 0.1% gain in February. The consensus expected the CPI to increase 0.1%. Excluding food and energy, core prices increased 0.2% in March and ended a string of three consecutive months of 0.1% gains. The consensus expected these prices to increase 0.1%. The surprises in both the headline and core indices were mainly the result of stronger-than-expected housing costs.
Separately, the Empire Manufacturing Survey for April registered a reading of 1.3, which was down from the prior month's reading of 5.6. Market had expected the survey to improve to 7.5. Also, the April NAHB Housing Market Index rose to 47 from 46 while the consensus expected the reading to increase to 50.
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