Gold futures snapped a two-day straight loss to end higher Monday, on its safe haven appeal after the U.S. budget impasse entered a second week, with commodity prices moving up. The precious metal also rode on investor concerns that the partial shutdown could last for an extended period, and could culminate in a U.S. default.
The dollar also weakened against a basket of major currencies, as macroeconomic data due for the unfolding week are likely to be delayed due to the ongoing budget crisis. Gold for December delivery, the most actively traded contract, jumped $15.20 or 1.2 percent to close at $1,325.10 an ounce Monday on the Comex division of the New York Mercantile Exchange.
Gold for December delivery scaled an intraday high of $1,329.50 and a low of $1,307.90 an ounce. Last week, gold lost over 2 percent to settle near a two-month low mostly as the dollar trended higher with investors focused on the implications of the partial U.S. government shutdown and on debt ceiling worries.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, were unchanged at 899.99 tons. The dollar index, which tracks the U.S. unit against six major currencies, traded at 79.92 on Monday, down from 80.13 late Friday in North American trade. The dollar scaled a high of 80.14 intraday and a low of 79.91.
The euro traded higher against the dollar at $1.3579 on Monday, as compared to its previous close of $1.3566 late Friday in North America. The euro scaled a high of $1.3591 intraday and a low of $1.3544.
In economic news, the World Bank on Monday lowered its growth projections for developing East Asia, citing slowing growth in China and other economies in the region. The lender has now forecast 7.1 percent growth for the region in 2013, less than the 7.8 percent growth it predicted in April. Growth in 2014 is seen at 7.2 percent. The World Bank expects the Chinese economy to expand 7.5 percent this year and 7.7 percent in 2014.
Elsewhere, the Bank of Japan expects industrial production to continue increasing moderately in the coming months, a monthly report from the central bank showed on Monday. Both public and housing investments are expected to continue trending upward, while business fixed investment is seen expanding at a moderate pace as corporate profits continue to improve. The bank reiterated private consumption to likely remain resilient, supported by improvement in the employment and income situation.
Source: RTT Staff Writer
Source:BullionBulletin