Gold futures ended higher on Monday, as global economic headwinds raised the safe haven appeal of precious metals with the dollar trending lower against a select band of currencies.
A drop in global equities earlier in the day and Europe’s economic malaise also contributed to the yellow metal’s uptick.
Chinese trade surplus declined more than expected in September while exports and imports growth remained strong, official data from China showed Monday.
Gold has been trending higher since last Wednesday, after the minutes of the U.S. Federal Reserve’s September monetary policy meeting allayed fears of an early rate hike.
Gold for December delivery, the most actively traded contract, gained $8.30 or 0.7 percent to settle at $1,230.00 an ounce on the Comex division of the New York Mercantile Exchange on Monday.
Gold for December delivery scaled an intraday high of $1,238.00 and a low of $1,223.60 an ounce.
On Friday, gold ended lower after the dollar ticked higher against a select band of major currencies on signs of an improving U.S. economy, even as global equity markets declined. Despite the loss, gold futures gained 2.4 percent last week.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, edged down to 759.44 tons from its previous close of 762.08 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 85.56 on Monday, down from its previous close of 85.68 late Friday in North American trade. The dollar scaled a high of 85.75 intraday and a low of 85.41.
The euro trended higher against the dollar at $1.2673 on Monday, as compared to its previous close of $1.2631 late Friday in North American trade. The euro scaled a high of $1.2699 intraday and a low of $1.2622.
In economic news, a report from the General Administration of Customs of the People’s Republic of China Monday showed China’s trade surplus came in at $31 billion in September, less than the $41.41 billion expected by the economists. In August, a surplus of $49.8 billion was recorded. Nonetheless, the surplus for the third quarter was the largest in Chinese history.
China’s exports grew 15.3 percent year-over-year in September, faster than the 12 percent rise expected by economists. In August, exports had increased 9.4 percent. Imports recovered by 7 percent, defying expectations for a 2 percent decline. In August, imports had dropped 2.4 percent.
Meanwhile, People’s Bank of China Governor Zhou Xiaochuan in a statement said China’s employment situation is better than expected and inflation stabilized at a low level. Xiaochuan indicated the bank will continue to implement prudent monetary policy.
Among data awaited later this week are the U.S. Commerce Department’s retail sales and housing starts reports for September, as well as manufacturing surveys by the New York Federal Reserve and the Philadelphia Federal Reserve.
Also on focus are the weekly jobless claims data, the housing market index, the preliminary consumer sentiment survey for November, besides the producer prices index and the business inventories report.
The material has been provided by InstaForex Company – www.instaforex.com