Gold futures snapped a three-day loss to end a shade higher Monday, with the dollar dropping against some major currencies. Investors sought the safe haven status of the precious metal with global equities declining on the impact of the sequester in the US, indicated with automatic spending cuts, and China concerns. Last Friday, the precious metal dropped to a seven-month low, mostly tracking rising global equity markets.
Chinese stocks plummeted around 3.7 percent at the Shanghai Composite Index, driven by property and construction sectors, with the government making efforts to impose new measures to bring down surging home prices. This was the worst slump for the index since August 2011.
Gold for April delivery, the most actively traded contract, gained $0.10 to close at $1,572.40 an ounce Monday on the Comex division of the New York Mercantile Exchange.
Gold for April delivery scaled an intraday high of $1,584.30 and a low of $1,569.70 an ounce.
Last week, gold settled flat after some upbeat global macroeconomic data out of the U.S. and Europe, and on developments in Italy. Political parities in Italy have begun exploring possibilities of forming a government after initial rhetoric from various groups to the contrary.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 82.25 on Monday, down from 82.28 late Friday in North American trade. The dollar scaled a high of 82.47 intraday and a low of 82.23.
The euro traded lower against the dollar at $1.3009 on Monday, as compared to $1.3014 late Friday in North America. The euro scaled a high of $1.3031 intraday and a low of $1.2984.
In economic news, eurozone producer price inflation slowed to 1.9 percent in January as expected by economists, Eurostat reported. The annual rate fell from 2.1 percent in the prior month. Month-on-month, producer prices were up 0.6 percent, reversing a 0.2 percent drop in December. Excluding energy prices, euro area producer price inflation fell to 1.4 percent from 1.6 percent.
Meanwhile, data released by the think-tank Sentix showed that eurozone investor confidence declined in March after improving for six months in a row. The index fell to -10.6 in March, the weakest since December 2012, from -3.9 in the prior month. The March figure was worse-than the expected level of -4.6 points.
The Markit/Chartered Institute of Purchasing & Supply Purchasing Managers' Index for U.K. dropped to 46.8 in February from 48.7 in January. Economists had forecast the index to rise to 49. Readings below 50 suggests contraction of the sector. The British construction activity declined at the sharpest pace since October 2009 on solid reduction in output and new works, the Markit Economics survey showed.
China's non-manufacturing sector growth eased to a five-month low in February, a report by the China Federation of Logistics and Purchasing said Sunday. The official Purchasing Managers' Index fell to 54.5 in February from 56.2 in January.
by RTT Staff Writer
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