Gold futures ended lower for a second straight session Monday, as the dollar strengthened against a basket of major currencies and global equity markets climbed as investors opted for the riskier assets after some dovish comments from Fed Chief Janet Yellen.
Gold rallied last week, but comments from Federal Reserve Chair Janet Yellen late Friday set the precious metal up for weakness heading into April.
Speaking at the San Francisco Fed Conference on Friday, Yellen said an interest rate hike “may be warranted” this year, as long as the U.S. economic recovery is sustained.
“With continued improvement in economic conditions, an increase in the target range for that rate may well be warranted later this year,” the Fed Chief added.
Gold prices fell with the dollar consolidating gains against the euro, weighing on commodities in general.
Gold for April delivery, dropped $15.00 or 1.3 percent to settle at $1,184.80 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.
Gold for April delivery scaled an intraday high of $1,198.50 and a low of $1,181.60 an ounce.
Gold for June delivery, the most actively traded contract, dropped $15.40 or 1.3 percent to settle at $1,185.30 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.
Gold for June delivery scaled an intraday high of $1,199.60 and a low of $1,182.20 an ounce.
Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, remained unchanged at 737.24 tons on Monday, from its previous close of 743.21 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 97.95 on Monday, up from its previous close of 97.36 on Friday in late North American trade. The dollar scaled a high of 98.07 intraday and a low of 97.42.
The euro trended lower against the dollar at $1.0827 on Monday, as compared to its previous close of $1.0890 in North American trade late Friday. The euro scaled a high of $1.0890 intraday and a low of $1.0811.
In economic news, personal income in the U.S. increased slightly more than expected in February, a Commerce Department report showed Monday, while personal spending is indicated to have risen less than anticipated. Personal income climbed 0.4 percent in February, matching the upwardly revised increase seen in January. Economists expected income to rise by 0.3 percent, which would have matched the growth originally reported for the previous month.
Meanwhile, the report also showed that personal spending inched up 0.1 percent in February after dipping 0.2 percent in January. Spending had been expected to edge up by 0.2 percent.
Pending home sales in the U.S. increased much more than expected in February, with pending sales jumping to their highest level in twenty months, a report from the National Association of Realtors showed Monday. NAR’s pending home sales index surged 3.1 percent to 106.9 in February after climbing 1.2 percent to a slightly downwardly revised 103.7 in January. Economists expected the index to edge up by 0.3 percent.
Elsewhere, eurozone economic sentiment rose for the fourth successive month to its highest level in nearly four years as lower oil prices, weak euro and measures of the central bank boosted confidence among firms and consumers, a survey by the European Commission showed Monday. The economic sentiment index climbed to 103.9 from 102.3 in February, which was revised from 102.1. Economists expected a score of 103. This was the strongest reading since July 2011, when it was 104.
Germany’s consumer prices increased for the second straight month in March, preliminary data from the statistical office Destatis showed Monday. Consumer prices rose 0.3 percent from last year after increasing 0.1 percent in February. The annual increase came in line with expectations.
The U.K. mortgage approvals rose to a 6-month high in February, the Bank of England reported Monday. The number of mortgages approved for house purchases rose to 61,760 in February from 60,707 in January. This was the highest since August and above the expected level of 61,000.
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