A firm U.S. currency on the back of strong economic data.
Bullion prices retreated for a second session on Tuesday, 05 August 2014 in response to a firm U.S. currency on the back of strong economic data. Strong dollar inex also pushed prices lower. Gold has been under pressure since Monday as investors flocked back to stocks after last week's big drop on the major indexes.
Gold for December delivery shed $3.60 to settle at $1,285.30 an ounce.
September silver fell 40 cents to $19.83 an ounce.
The dollar index rose 0.3% to 81.57 as U.S. factory orders in June increased to a seasonally adjusted 1.1%, above the 0.6% rise forecast.
In overnight news, there was some downbeat economic data coming out of China. The HSBC China services purchasing managers index (PMI) fell to 50.0 in July from 53.1 in June. That was the lowest reading in the nine year history of this particular index. A reading over 50.0 suggests expansion and a reading under 50.0 suggests contraction. The Asian stock markets were pressured on the news. The news was a bearish underlying factor for the raw commodity sector.
Meantime, in the European Union, retail sales for the bloc rose 0.4% in June from May, the fastest pace since 2007. The Markit data firm reported the EU's composite PMI came in at 53.8 in July from 52.8 in June. That reading was as bit weaker than expected.
U.S. economic data released Tuesday was substantial including, the U.S. services purchasing managers index (PMI), manufacturers' shipments and inventories, the global services PMI, and the ISM non-manufacturing report. Taken together, this data was upbeat and fell into the camp of U.S. monetary policy hawks who favor raising U.S. interest rates sooner rather than later.
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