Gold Ends Higher Despite A Strong Dollar

(RTTNews) - Gold futures snapped a three-day loss to end higher on Monday, despite the dollar strengthening against some major currencies, as investors look for cues as to when the Federal Reserve would begin hiking interest rates, with a slew of economic data coming up later this week.

Nevertheless, the precious metal pared gains after some upbeat factory orders data from the U.S. and as the dollar strengthened.

Last week, the Fed removed any calendar references from its statement on interest rates, meaning that a rate hike could be on the table at all upcoming meetings, including June, despite a rough first quarter for the U.S. economy.

Looking ahead, the U.S. jobs report for April due Friday should shed light on whether June is a real possibility for the first interest rate in years.

Gold has struggled since hitting $1214 late in April, as traders have tried to make sense of mixed signals on interest rates from the Federal Reserve. A June rate hike is apparently on the table despite first quarter economic weakness, as recent data has hinted that the U.S. job market is heating up in time for summer.

Meanwhile, gold import by India jumped 19.5 percent to $34.32 billion in fiscal year 2014-15, from $28.7 billion in fiscal year 2013-2014, due mainly to lesser restrictions by the Reserve Bank of India and declining prices. India is the largest consumer of gold in the world.

Gold for June delivery, the most actively traded contract, jumped $12.30 or 1.1 percent to settle at $1,186.80 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for June delivery scaled an intraday high of $1,192.10 and a low of $1,176.60 an ounce.

On Friday, gold futures dropped $7.90 or 0.7 percent to settle at $1,174.50 an ounce, as investors continued to mull over the Federal Reserve's open-ended statement on interest rates leaving traders to speculate on when tightening will begin.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to 741.75 tons from its previous close of 739.06 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.43 on Monday, up from its previous close of 95.28 on Friday in late North American trade. The dollar scaled a high of 95.64 intraday and a low of 94.04.

The euro trended lower against the dollar at $1.1158 on Monday, as compared to its previous close of $1.1199 in North American trade late Friday. The euro scaled a high of $1.1225 intraday and a low of $1.1123.

On the economic front, a Commerce Department report Monday showed a sharp increase in new orders for U.S. manufactured goods in March, reflecting a notable rebound in orders for transportation equipment. Factory orders surged 2.1 percent in March following a revised 0.1 percent decrease in February. Economists expected orders to increase by about 2.0 percent compared to the 0.2 percent uptick in the previous month.

The manufacturing sector in China slipped further into contraction territory in April, a revised survey from HSBC Bank showed on Monday, with a PMI score of 48.9. That missed the forecast of 49.4, and down from last month's preliminary reading of 49.2.

The Eurozone manufacturing sector expanded slightly more than initially estimated in April, final data from Markit showed Monday. The Purchasing Managers' Index dropped to 52 in April from 52.2 in March. But it was above the flash score of 51.9.

Eurozone investor confidence weakened slightly in May, survey data from the think tank Sentix revealed Monday. The investor confidence index dropped to 19.6 from 20 in April, which was the highest score since August 2007. It was forecast to drop to 19.3.