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Gold Futures Settle Slightly Lower

Thu, 7th Feb 2019 19:15

WASHINGTON (Alliance News) - Gold prices edged lower on Thursday, but losses were just marginal as the yellow metal managed to retain its safe haven status after global stocks tumbled following the EU lowering its growth forecast for the Euro area.

A steady dollar limited gold's upside. The greenback gained against most major currencies following the downward revision in eurozone growth forecast by the EU.

The dollar index rose to a high of 96.46 before giving up some gains. At 96.25, the index was up by about 0.1%.

Gold futures for April ended down USD0.20, at USD1,314.20 an ounce, after moving in a tight range.

On Wednesday, gold futures for April ended down USD3.80, or 0.4%, at USD1,314.40 an ounce.

Silver futures for March ended up USD0.012, at USD15.713 an ounce.

Copper futures for March settled at USD2.8285 per pound, down USD0.0080 from previous close.

The European Commission slashed its GDP growth forecast for 2019 to 1.3% from 1.9% and lowered its estimate for growth in 2020 to 1.6% from 1.7%.

The downgrade reflected external factors, such as trade tensions and the slowdown in emerging markets, notably in China. Officials warned that the European outlook faces substantial risks due to the uncertainty about Brexit and the slowdown in China.

The EU also lowered its growth forecast for Germany and Italy, two of the largest economies in Europe.

Preliminary figures from the Federal Statistical Office showed that Germany's industrial production decreased by a calendar and seasonally-adjusted 0.4% in December, falling for a fourth consecutive month. In November, it decreased 1.3%, revised from 1.9%. Economists had expected a 0.8% increase in December.

In US economic news, first-time claims for US unemployment benefits pulled back in the week ended February 2nd after the jump seen in the previous week, according to a report released by the Labor Department on Thursday.

The report said initial jobless claims fell to 234,000, a decrease of 19,000 from the previous week's unrevised level of 253,000. Economists had expected jobless claims to drop to 221,000.

On the Brexit front, the European Commission President Jean-Claude Juncker and British Prime Minister Theresa May have reportedly agreed to meet before the end of this month. Over the next few days, officials from EU and the UK are scheduled to engage in a discussion over Irish backstop.

Markets were also tracking news on US-China trade front. Despite positive comments from US President Donald Trump and US Treasury Secretary Steven Mnuchin that the two countries may reach a deal sometime soon, there are still doubts about a deal being struck before the expiry of the 90 day truce agreed to by the presidents of the two countries in early December 2018.

According to a report from CNBC, Trump and Chinese President Xi Jinping are "highly unlikely" to meet before a March 2nd deadline.

Copyright RTT News/dpa-AFX

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