Gold prices drop while silver ends marginally higher
Bullion metal prices ended mixed on Tuesday, 13 August 2013 at Comex. Gold futures fell on Tuesday after a four-day winning streak, pressured by strength in the dollar and concerns that improving economic data suggest that the U.S. Federal Reserve will soon begin to taper its bond purchase program. Silver ended marginally higher
Gold for December delivery ended lower by $13.7 (1%) at $1,320.5 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
September silver ended higher by $0.05 (0.01%) at $21.34 an ounce on Tuesday.
In the European Union on Tuesday, it was reported industrial output rose by 0.7% from May to June. In the second quarter, output was up 1.1% from the first quarter. The closely watched German ZEW economic expectations index for August came in at 42.0 versus 36.3 in July. The data hints the Euro zone economy is also on the upswing.
Recent news reports cite a significant increase in demand for physical gold coming out of China. Demand for gold from Chinese consumers hit a record of 385.5 metric tons in the second quarter, according to a Chinese trade group. The reports also said China is poised to take over leadership from India as the world's leading consumer of gold. Consumer demand for physical gold from India is also on the upswing, the reports said.
India has again raised its import taxes on gold and silver in an effort to curb its current-account deficit, it was reported Tuesday. That news also added to the selling pressure in gold.
Many believe this week's U.S. data will show an improving U.S. economy, one that is possibly strong enough to begin to wean it from the Fed's monthly bond-buying program, also known as quantitative easing.
The U.S. dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.3% on Tuesday.
Among economic data expected at Wall Street today, July retail sales increased 0.2% after increasing an upwardly revised 0.6% in June. The consensus expected sales to increase 0.2%. Excluding motor vehicle sales, which fell 1.0%, spending rose a solid 0.5% in July. That was up from a 0.1% gain in June and above the consensus expectation that called for an increase of 0.3%.
In today's remaining economic news, total business inventories were unchanged in June after falling a downwardly revised 0.1% (from +0.1%) in May. The consensus expected business inventories to increase 0.1%.
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