Investing.com – Gold futures erased gains on Wednesday, retreating from a one-week high as a broadly stronger U.S. dollar reduced the appeal of the precious metal as an alternative asset.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,508.45 a troy ounce during U.S. morning trade, slumping 0.5%.
It earlier rose as much as 0.7% to USD1,526.45 a troy ounce, the highest price since May 4.
The dollar rose sharply against the euro as a mounting sense of uncertainty over whether Greece will need supplementary financial aid weighed on the single currency.
Meanwhile, U.S. government data showed that the trade deficit widened to USD48.2 billion in March, the largest since June 2010.
The report said U.S. exports grew 4.6%, the biggest month-to-month gain since March 1994. Imports rose 4.9%, the highest since September 2008.
The dollar index, which was trading down earlier, was up 0.43% to hit 75.07 during U.S. morning trade. Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.
Despite the pullback, gold prices were expected to remain supported amid concerns over accelerating inflation in China and the euro zone’s sovereign-debt crisis.
Earlier in the day, official data showed that China's annual rate of inflation in April rose 5.3%, down slightly from 5.4% in March, but still surpassing expectations for a 5.2% increase. The government’s full-year inflation rate target stands at 4%.
Meanwhile, French Finance Minister Christine Lagarde said that it was hard to see Greece returning to debt markets in 2012, adding that Europe would have to keep financing countries in difficulty to avoid a costly restructuring.
Elsewhere, silver for July delivery plunged 3.4% to trade at a two-day low of USD37.19 a troy ounce during U.S. morning trade, after earlier rising by as much as 2.5% to USD39.47.
On the Comex division of the New York Mercantile Exchange, gold futures for June delivery traded at USD1,508.45 a troy ounce during U.S. morning trade, slumping 0.5%.
It earlier rose as much as 0.7% to USD1,526.45 a troy ounce, the highest price since May 4.
The dollar rose sharply against the euro as a mounting sense of uncertainty over whether Greece will need supplementary financial aid weighed on the single currency.
Meanwhile, U.S. government data showed that the trade deficit widened to USD48.2 billion in March, the largest since June 2010.
The report said U.S. exports grew 4.6%, the biggest month-to-month gain since March 1994. Imports rose 4.9%, the highest since September 2008.
The dollar index, which was trading down earlier, was up 0.43% to hit 75.07 during U.S. morning trade. Gold prices often move inversely to the U.S. dollar, as gold becomes more expensive for buyers using other currencies.
Despite the pullback, gold prices were expected to remain supported amid concerns over accelerating inflation in China and the euro zone’s sovereign-debt crisis.
Earlier in the day, official data showed that China's annual rate of inflation in April rose 5.3%, down slightly from 5.4% in March, but still surpassing expectations for a 5.2% increase. The government’s full-year inflation rate target stands at 4%.
Meanwhile, French Finance Minister Christine Lagarde said that it was hard to see Greece returning to debt markets in 2012, adding that Europe would have to keep financing countries in difficulty to avoid a costly restructuring.
Elsewhere, silver for July delivery plunged 3.4% to trade at a two-day low of USD37.19 a troy ounce during U.S. morning trade, after earlier rising by as much as 2.5% to USD39.47.