Gold Ends Higher As U.S. Data Disappoints

(RTTNews) - Gold futures snapped a three-day loss to end slightly higher on Monday, with investors turning to the precious metal as the riskier global equity assets declined, even as the dollar remained strong on signs the Federal Reserve may normalize interest rates ahead of schedule.

The precious metal also found support with some disappointing economic data from the U.S. with existing home sales unexpectedly dropping and the Chicago Fed's national activity index also declining.

Meanwhile, worries about the Chinese economy grew after the Chinese Finance Minister Lou Jiwei said the government may not make major policy changes despite downward pressure on economic growth.

Last week, the Fed reiterated its pledge to keep interest rates at near-zero for a extended period after its bond-buying program ends. However, the Fed also hinted that monetary tightening will be less gradual once underway.

Gold for December delivery, the most actively traded contract, gained $1.30 or 0.1 percent to settle at $1,217.90 an ounce on the Comex division of the New York Mercantile Exchange on Monday.

Gold for December delivery scaled an intraday high of $1,221.00 and a low of $1,208.80 an ounce.

On Friday, gold futures extended losses to a third successive session to end at a more than eight-month low as the dollar strengthened against some major currencies. For the week, gold shed about 1.2 percent.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, dropped to 776.44 tons from its previous close of 784.22 tons on Friday.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.81 on Monday, up from its previous close of 84.74 late Friday in North American trade. The dollar scaled a high of 84.86 intraday and a low of 84.52.

The euro trended lower against the dollar at $1.2827 on Monday, as compared to its previous close of $1.2935 late Friday in North American trade. The euro scaled a high of $1.2868 intraday and a low of $1.2818.

In economic news from the U.S., data from Chicago Federal Reserve showed economic activity weakened in August, with the Chicago Fed's national activity index declining to -0.21 in the month, down from a positive reading of 0.26 in the previous month.

Meanwhile, according to a report from the National Association of Realtors, U.S. existing home sales unexpectedly dropped 1.8 percent to a seasonally adjusted 5.05 million in August, from a downwardly revised 5.14 million in July. Economists expected existing home sales to climb to an annual rate of 5.18 million from the 5.15 million originally reported for the previous month.

Eurozone consumer confidence dropped for a fourth month in September to its lowest since February, preliminary data from the European Commission showed Monday. The flash consumer confidence indicator for the euro area dropped to -11.4 from -10 in August. The reading was below economists' consensus of -10.5.

Meanwhile, Bundesbank said German industrial production in July with output growing 1.9 percent, the most since March 2012. The growth was reportedly was largely influenced by the timing of school holidays., which were concentrated in August this year, the central bank said in its monthly report on Monday.