The price of gold was extending gains Tuesday morning as traders were concerned over the U.S. economic growth after Federal Reserve Chairman Ben Bernanke warned over the economic impact of any failure to agree a higher ceiling.
Gold for February delivery, the most actively traded contract, added $8.60 to $1,678.00 an ounce. Yesterday, gold settled marginally higher with the euro advancing to a fresh 11-month high against the U.S. dollar
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged at 1,337 73 tons.
Meanwhile, the U.S. dollar was lingering around a 11-month low versus the euro and leveling off from its 2-week low against sterling. The buck was hovering around a 30-month high versus the yen and ticking higher against the Swiss franc.
In economic news, Germany’s EU harmonized inflation increased less than initially estimated in December, final data from the Federal Statistical Office showed. The harmonized index of consumer prices (HICP), measured under the EU methodology, increased 2 percent on an annual basis in December, slower than the 2.1 percent growth estimated earlier. In November, the HICP had gained 1.9 percent.
A separate report from the Federal Statistical Office revealed that German economic growth eased more than expected last year, due to significant slowdown in economic activity in the second half of the year. The gross domestic product rose 0.7 percent in price-adjusted terms in 2012, much weaker than the 3 percent growth in 2011 and 4.2 percent expansion in 2010.
Meanwhile, U.K. consumer price inflation remained unchanged at 2.7 percent for the third month in a row in December, the Office for National Statistics said. The rate also came in line with economists’ expectations.
Elsewhere, exports from euro area increased for the first time in three months in November, Eurostat reported. Shipments rose by seasonally adjusted 0.8 percent month-on-month, partially offsetting the 1.2 percent decrease in October. On the other hand, imports fell 1.5 percent, following a 0.8 percent rise.
The prices of silver and platinum were moving higher in morning deals.
From the U.S., the Labor Department is due to release its producer price inflation report for December at 8:30 am ET. Economists estimate a 0.1 percent drop in producer prices for the month, while core producer prices may have risen 0.2 percent. In October, the producer price index fell 0.8 percent but the core index rose 0.1 percent.
Simultaneously, the Commerce Department will release retail sales report for December. The consensus estimates call for a 0.2 percent increase in retail sales and a 0.3 percent increase in retail sales, excluding autos. Sales had risen 0.3 percent in October.
by RTT Staff Writer
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