(RTTNews) - Gold prices finished moderately higher on Monday as the dollar remained near $1.50 against the euro, keeping the precious metal's hedge appeal high.

December-dated gold finished at $1,181.10 per ounce, up $6.90 on the session. With the rise, gold recovered some of its losses from the previous session.

The dollar was near 1.5020 after hitting a 16-month low of 1.5143 last week. Gold dropped late last week, briefly hitting as low as $1,130.10, on word of Dubai's credit problems. The metal had hit a record $1,187.90 last week.

"This rush into the U.S. currency and the decline in world stock markets triggered a swift correction in gold," said Jeffrey Nichols, Managing Director of American Precious Metals Advisors and Senior Economic Advisor to Rosland Capital, "a correction that was, in any event, overdue given the speed and magnitude of the metal's recent advance."
On the economic front, the Institute for Supply Management - Chicago said its index of activity in the manufacturing sector rose to 56.1 in November from 54.2 in October, with a reading above 50 indicating growth in the sector. The increase by the index surprised economists, who had expected the index to slip to 53.3.

At 10 a.m. ET on Tuesday, traders will watch for the release of construction spending data, the ISM manufacturing report and pending home sales data.

Construction spending is expected to decline 0.4% in October, compared to a rise of 0.8% in September.

Institute for Supply Management manufacturing index is expected to come in at 54.8 in November, compared to 55.7 in October.

by RTT Staff Writer

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