WASHINGTON (dpa-AFX) - Gold futures settled lower on Tuesday, extending losses to a seventh straight session and suffering the longest losing streak in about two years, weighed down by a stronger dollar.
A downward revision in China's growth forecast contributed as well the yellow metal's weakness, as a weak Chinese economy could result in a significant drop in demand for gold.
The U.S. dollar gained against most major currencies amid optimism the U.S. and China will agree on a trade deal sometime soon. Better than expected report on U.S. non-manufacturing activity for the month of February too contributed to the greenback's rise.
The dollar index rose to a high of 97.01 before paring some gains. It was hovering around 96.90 about an hour ago, gaining 0.2%.
Gold futures for April ended down $2.80, or 0.2%, at $1,284.70 an ounce.
On Monday, gold futures for April ended down $11.70, or 0.9%, at $1,287.50 an ounce.
Silver futures for May settled at $15.105 an ounce, unchanged from previous close. Copper futures for May ended up $0.0245, at $2.9335 per pound.
The dollar climbed on optimism over a potential U.S.-China trade deal after U.S. Secretary of State Mike Pompeo said that trade talks with China aimed at ending tariffs on hundreds of billions of dollars worth of products would be successful.
China cut its GDP growth target for 2019 to a range of 6% - 6.5% from the 2018 target of around 6.5%, citing challenges from rising debt and a trade dispute with the U.S.
China's private sector growth weakened marginally in February with softer growth in services activity, survey data from IHS Markit showed on Tuesday.
The Caixin composite output index fell to 50.7 in February from 50.9 in January. Nonetheless, a reading above 50 indicates expansion in the private sector.
The services Purchasing Managers' Index slid to 51.1 from 53.6 a month ago. The score was forecast to rise moderately to 53.5.
In U.S. economic news, a report from the Institute for Supply Management showed services sector growth rebounded by much more than expected in the month of February.
The ISM said its non-manufacturing index climbed to 59.7 in February after falling to 56.7 in January, with a reading above 50 indicating growth in the service sector. Economists had expected the index to inch up to 57.3.
The rebound by the headline index was partly due to a notable acceleration in the pace of new orders growth, with the new orders index surging up to 65.2 in February from 57.7 in January.
The business activity index also jumped to 64.7 in February from 59.7 in January, although the employment index dipped to 55.2 from 57.8.
The report also said the prices index fell to 54.4 in February from 59.4 in January, indicating a notable slowdown in the pace of price growth.
Meanwhile, new homes sales in the U.S. unexpectedly showed a notable increase in the month of December, according to a report released by the Commerce Department on Tuesday.
The report said new home sales jumped by 3.7% to an annual rate of 621,000 in December after surging up by 9.1% to a revised rate of 599,000 in November.
Economists had expected new home sales to tumble by 8.7% to a rate of 600,000 from the 657,000 originally reported for the previous month.
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