Gold Rebounds To End Above USD1,200 As Dollar Weakens
Washington (Oct 6) Gold futures rebounded to end higher on Monday, after the dollar trended lower against some major currencies with demand for the precious also metal picking up.
Gold has been hit hard by speculation that the US Federal Reserve will raise rates ahead of schedule amid decent progression in the US economy recovery.
Unemployment rate in the US slipped below 6% for the first time since the recession last month.
Gold for December delivery, the most actively traded contract, gained USD14.40 or 1.2% to settle at USD1,207.30 an ounce on the Comex division of the New York Mercantile Exchange on Monday.
Gold for December delivery scaled an intraday high of USD1,209.90 and a low of USD1,183.30 an ounce.
On Friday, gold plunged after some upbeat jobs data from the US spiked the dollar higher, with unemployment rate at its lowest level in over six years while employment rose more than expected in September.
Holdings of SPDR Gold Trust , the world's largest gold-backed exchange-traded fund, remained unchanged at 767.47 tons on Monday from its previous close of 768.66 tons.
The dollar index, which tracks the US unit against six major currencies, traded at 86.14 on Monday, down from its previous close of 86.69 late Friday in North American trade. The dollar scaled a high of 86.68 intraday and a low of 86.05.
The euro trended higher against the dollar at USD1.2593 on Monday, as compared to its previous close of USD1.2513 late Friday in North American trade. The euro scaled a high of USD1.2606 intraday and a low of USD1.2510 .
In economic news from the eurozone, investor confidence declined for the third straight month, hitting the lowest level since May 2013 . The investor confidence index fell to minus 13.7 in October from minus 9.8% in September.
Meanwhile, German factory orders declined at the fastest pace since January 2009 , driven largely by a fall in capital goods demand, data from Destatis showed Monday. Factory orders fell 5.7% month-over-month in August following the 4.9% rise in July. This was more than the 2.5% drop expected by economists and the biggest decline since January 2009 , when orders were down 7.7%.
Germany's construction sector stabilized in September ending a five-month period of contracting activity, Markit Economics said Monday. The seasonally adjusted Purchasing Managers' Index rose to 50 from 47.7 in August.
The World Bank slashed its growth for China to 7.4% this year, from a previous forecast of 7.6%. This is below China's target of about 7.5%. For next year, the lender has now forecast the Chinese economy to grow 7.2%, down from 7.5%. China's growth last year rose 7.7%.
Developing East Asia is forecast to expand 6.9% this year and the next, the Washington -based lender said in its East Asia Pacific Economic Update on Monday. In April, the bank had projected 7.1% growth each for 2014 and 2015.
Excluding China , growth will pick up the next year as a gradual recovery in high-income economies boosts demand for exports from the region, the bank estimated. The growth in developing countries excluding China is expected to bottom out at 4.8% in 2014 before rising to 5.3% in 2015.
Investors will be paying close attention to the Fed Reserve for clues about whether interest rates will be raised ahead of schedule.
Source: RTTnews
