Gold Price Ends Higher Even As Dollar Strengthens
San Francisco (Aug 17) Gold futures snapped a two-day loss to end higher on Monday, even as the dollar trended higher against some major currencies. The uptick comes amid concerns over China's move to devalue the yuan, and on some mixed economic data from the U.S.
Gold benefited from the yuan devaluation, stoking speculation the Federal Reserve will delay rate hikes in reaction to the move. It is feared that China's weak yuan will hurt U.S. exporters, which may prompt the Fed to keep rates at zero to ensure the U.S. economic recovery.
Investors will keep an eye on U.S. economy for clues about whether there is enough momentum to justify a rate hike.
A National Association of Home Builders report on Monday showed modest improvement in homebuilder confidence in August, indicating the single-family housing is making slow but steady progress. The housing market index reached its highest level since hitting a matching reading in November of 2005.
Business activity for New York manufacturers unexpectedly declined in August, a report from the Federal Reserve Bank of New York said Monday, with the index of regional manufacturing activity falling to a six-year low.
Gold for December delivery, the most actively traded contract, gained $5.70 or 0.5 percent, to settle at $1,118.40 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.
Gold for December delivery scaled an intraday high of $1,122.20 and a low of $1,112.90 an ounce.
On Friday, gold prices for December delivery dropped $2.90 or 0.3 percent, to settle at $1,112.70 an ounce, as the dollar strengthened after some mixed economic data from the U.S. with industrial production rising more than expected in July.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 671.87 tons on Monday, from its previous close.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.81 on Monday, up from its previous close of 96.61 in late North American trade on Friday. The dollar scaled a high of 96.94 intraday and a low of 96.51.
Source: RTTnews
