Gold Settles Higher, Ends Above $1,100

(RTTNews) - Gold futures ended higher for a third straight session on Monday, after some dovish comments from a top Federal Reserve official that suggests a delay in rate hike.

Fed Vice Chair Stanley Fischer said this morning that the central bank should not hike rates until inflation is back to normal. Consumer prices have been rising at an anemic pace despite interest rates near zero for the past few years.

The dollar also weakened, lending support to buying in dollar-priced commodities as it makes them cheaper to holders of other currencies.

Meanwhile, China is under increased pressure to step up stimulus for the economy after data over the weekend showed a sharp decline in foreign and domestic demand as well as a slump in producer prices, raising the risks over its aim to achieve the 7 percent growth target.

Gold for December delivery, the most actively traded contract, gained $10.00 or 0.9 percent, to settle at $1,104.10 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for December delivery scaled an intraday high of $1,108.50 and a low of $1,089.00 an ounce.

On Friday, gold prices for December delivery gained $4.00 or 0.4 percent, to settle at $1,094.10 an ounce, as the dollar weakened after some soft U.S. jobs data, with growth in July coming in below expectations.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, edged down to 667.59 tons on Monday from its previous close of 667.93 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.15 on Monday, down from its previous close of 97.60 in late North American trade on Friday. The dollar scaled a high of 97.92 intraday and a low of 97.04.

The euro trended higher against the dollar at $1.1022 on Monday, as compared to its previous close of $1.0966 in North American trade late Friday. The euro scaled a high of $1.1042 intraday and a low of $1.0926.

On the economic front, Chinese exports plunged unexpectedly in July, while inflation rose only marginally and stayed well below the government target.

China's exports decreased by 8.3 percent in July, reversing the previous month's 2.8 percent increase. The decline was bigger than the expected 1.5 percent fall. At the same time, imports declined 8.1 percent after a 6.1 percent fall. It was expected to drop 8 percent. Nonetheless, the decline largely reflected easing commodity prices.

Consequently, the trade surplus dropped to $43 billion, well below the expected surplus of $54.7 billion.

Eurozone investor confidence unexpectedly weakened in August, due mainly to the uncertainty regarding the Chinese stock market outlook and the dampened expectations for the economy in Asia excluding Japan, survey results from Sentix showed Monday. The investor confidence index dropped to 18.4 from 18.5 in July, the think tank said. Economists had expected a higher score of 20.

Japan's consumer sentiment decreased in July, after rising slightly in the prior month, survey figures from Cabinet Office showed Monday. The consumer confidence index fell to 40.3 in July from 41.7 in June. In May, the score was 41.4.

Greece and its creditors may be able to conclude their talks over a EUR 86 billion bailout deal for the country as early as Tuesday, reports said Monday. The process has been hastened to enable the deal go to national parliaments in the euro area for approval. The Greek parliament is expected to pass any possible deal by the middle of the week, reports said citing sources.

The Organization for Economic Co-operation and Development said Monday the composite leading index signals stable growth momentum in the region. The leading index remained unchanged at 100 in June. While the leading index signaled firming growth in the euro area, it pointed to growth easing to long-term trends in the United States and the United Kingdom.

Stable growth momentum is expected in Germany, Japan and India. In Brazil and China, the index suggested more strong than last month to a loss in growth momentum.