Gold futures snapped a seven-day losing streak to settle smartly higher Monday, mostly on profit taking ahead of the Federal Open Market Committee meet, even as the dollar weakened against a basket of major currencies. The rebound came after the precious metal plunged as low as $1,336.30 an ounce intraday.
The outcome of the Federal Reserve meeting later this week is expected to end speculations the central bank would drastically scale down its quantitative easing program.
Gold for June delivery, the most actively traded contract, jumped $19.40 or 1.4 percent to close at $1,384.10 an ounce Monday on the Comex division of the New York Mercantile Exchange.
Gold for June delivery scaled an intraday high of $1397.90 and a low of $1336.30 an ounce.
Last week, gold dived 5 percent after San Francisco Federal Reserve President John Williams indicated the Fed may slow the pace of its asset purchases as early as this summer if labor market indicators continue to improve.
Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 1,038.41 tons from 1,041.42 tons.
The dollar index, which tracks the U.S. unit against six major currencies, traded at 83.88 on Monday, down from 84.21 late Friday in North American trade. The dollar scaled a high of 84.26 intraday and a low of 83.85.
The euro traded higher against the dollar at $1.2877 on Monday, as compared to $1.2843 late Friday in North America. The euro scaled a high of $1.2882 intraday and a low of $1.2820.
In economic news, house prices in the U.K. house indicated a fifth consecutive monthly increase amid limited supply which took average asking prices to a record, a survey by Rightmove showed Monday. Prices hit a record GBP 249,841 in May, as new sellers raised their prices by 2.1 percent from the prior month. Prices were up by the same rate in April. This has left prices 9.1 percent higher year-to-date, the strongest price start to a year since 2004.
Meanwhile, the Japanese government on Monday upgraded its assessment of the economy for the first time in two months, as a weak yen helped revive the country's exports and factory output.
From the eurozone, Italy's industrial new orders grew 1.6 percent in March from the prior month, due mostly to a 3.6 percent rise in non-domestic demand, data from the statistical office Istat revealed. Orders from domestic market increased only 0.2 percent.
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