Gold Ends Above $1,250 On Fed Taper Speculation

(RTTNews) - Gold futures ended higher for a third straight session Monday, due to lack of direction in the absence of any major economic releases, after some disappointing non-farm payrolls jobs data out of the U.S. last Friday.

Even as investors awaited major macroeconomic data for the week, the soft jobs data last week continued to trigger speculation that the Federal Reserve could slowdown tapering its quantitative easing program. While any tapering of the monetary stimulus is a negative for gold, its continuation pushes gold prices higher as it tends to trigger inflation. The precious metal is considered a hedge against inflation and tends to gain with any currency debasement.

Gold for February delivery, the most actively traded contract, gained $4.20 or 0.3 percent to close at $1,2451.10 an ounce Monday on the Comex division of the New York Mercantile Exchange.

Gold for February delivery scaled an intraday high of $1,255.30 and a low of $1,243.00 an ounce.

Last week, gold settled marginally higher on bargain hunting after recording its worst annual performance in over twelve years in 2013.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, were unchanged at 793.12 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 80.59 on Monday, down from its previous close of 80.63 late Friday in North American trade. The dollar scaled a high of 80.75 intraday and a low of 80.47.

The euro traded lower against the dollar at $1.3657 on Monday, as compared to its previous close of $1.3680 late Friday in North America. The euro scaled a high of $1.3684 intraday and a low of $1.3638.

In economic news, the Organization for Economic Cooperation and Development or OECD, said its leading indicator continues to signal an improving economic outlook in most advanced economies. The composite leading index, designed to anticipate turning points in economic activity, rose to 100.9 in November from 100.7 in October, the Paris-based organization said Monday.

OECD indicators point to economic growth firming in Japan, the United States and the United Kingdom. At the same time, the index for Canada indicates a positive change in momentum. In euro area as a whole, and in France and Italy, the indicators suggest a positive change in momentum. In Germany, the indicator showed signals of firming growth. In the emerging economies, the indices point to a tentative positive change in momentum in China and to growth below trend in India.

During this week, traders focus will be on the U.S. Commerce Department's retail sales report for December, the jobless claims report, the National Association of Home Builders' housing market index for January, January manufacturing surveys by the New York Federal Reserve and the Philadelphia Federal Reserve, and the Federal Reserve's industrial production report for December.