Precious metals settle with gains

Below expected Housing data at US lifts gold prices

Bullion metals ended moderately higher at Comex on Wednesday, 16 April 2014. Gold futures settled with a gain on Wednesday as traders assessed a speech from Federal Reserve Chairwoman Janet Yellen. A U.S. housing starts report released in early trading did not meet market expectations, which did helped lift the gold market. U.S. economic data showed that industrial production grew more than forecast in March, thanks to mining and utilities output. Construction on new homes in March reached the fastest pace in three months but missed economists' expectations.

Gold for June delivery tacked on $3.20, or 0.3%, to settle at $1,303.50 an ounce on the Comex division of the New York Mercantile Exchange after touching a low of $1,293.50 in electronic trading.

May silver rose 14.5 cents, or 0.7%, to $19.63 an ounce.

Chinese government data showed gross domestic product expanded 7.4% in the first quarter compared with the same period a year earlier. That's down from a growth rate of 7.7% in the previous quarter and below the Chinese leadership's target of about 7.5% but slightly above forecasts. On a quarterly basis, growth slowed from 1.7% to 1.4%.

The Federal Reserve's beige book was released Wednesday afternoon and was not a markets-mover. The report said the U.S. economy sees slight improvement following a fierce winter that crimped economic growth. Fed Chair Janet Yellen also gave a speech in New York Wednesday at midday. However, here remarks were not deemed market-sensitive either.

Data at Wall Street showed that housing starts increased 2.4% in March to 946,000 from an upwardly revised 920,000 in February. The consensus expected 955,000 new starts. Overall, the residential construction report was encouraging, but did not provide any evidence that the weakness in January and February was weather related. Starts remained well below 1.00 million, which was the average in the fourth quarter.

Separately, Industrial production increased 0.7% in March after increasing an upwardly revised 1.2% (from 0.6%) in February. The consensus expected industrial production to increase 0.5%. Manufacturing production increased 0.5% in March, down from an upwardly revised 1.4% (from 0.9%) in February. The March gain was in-line with the ISM production index. Despite a 0.8% decline in motor vehicles and parts production, durable goods manufacturing production increased 0.5%. Nondurable goods manufacturing production increased 0.7%, which was mostly the result of a 3.3% increase in petroleum and coal products production.

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