Gold Ends Higher Even As Dollar Strengthens

(RTTNews) - Gold futures snapped a two-day loss to end higher on Monday, even as the dollar trended higher against some major currencies. The uptick comes amid concerns over China's move to devalue the yuan, and on some mixed economic data from the U.S.

Gold benefited from the yuan devaluation, stoking speculation the Federal Reserve will delay rate hikes in reaction to the move. It is feared that China's weak yuan will hurt U.S. exporters, which may prompt the Fed to keep rates at zero to ensure the U.S. economic recovery.

Investors will keep an eye on U.S. economy for clues about whether there is enough momentum to justify a rate hike.

A National Association of Home Builders report on Monday showed modest improvement in homebuilder confidence in August, indicating the single-family housing is making slow but steady progress. The housing market index reached its highest level since hitting a matching reading in November of 2005.

Business activity for New York manufacturers unexpectedly declined in August, a report from the Federal Reserve Bank of New York said Monday, with the index of regional manufacturing activity falling to a six-year low.

Gold for December delivery, the most actively traded contract, gained $5.70 or 0.5 percent, to settle at $1,118.40 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for December delivery scaled an intraday high of $1,122.20 and a low of $1,112.90 an ounce.

On Friday, gold prices for December delivery dropped $2.90 or 0.3 percent, to settle at $1,112.70 an ounce, as the dollar strengthened after some mixed economic data from the U.S. with industrial production rising more than expected in July.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 671.87 tons on Monday, from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 96.81 on Monday, up from its previous close of 96.61 in late North American trade on Friday. The dollar scaled a high of 96.94 intraday and a low of 96.51.

The euro trended lower against the dollar at $1.1079 on Monday, as compared to its previous close of $1.1109 in North American trade late Friday. The euro scaled a high of $1.1125 intraday and a low of $1.1060.

In economic news, the NAHB/Wells Fargo Housing Market Index inched up to 61 in August from 60 in July, in line with economists' estimates. With the modest uptick, the housing market index reached its highest level since hitting a matching reading in November of 2005.

The New York Fed's general business conditions index tumbled to a negative 14.9 in August from a positive 3.9 in July, with a negative reading indicating a contraction in manufacturing activity. Economists expected the index to climb to a positive reading of 4.8.

German economic growth is set to remain strong in the second half of the year, Bundesbank said in its monthly report on Monday. The central bank said consumer spending and foreign demand would support economic activity, even as the economy benefited from the labor market strength.

Germany's factory employment increased in June from the previous year, preliminary figures from Destatis showed Monday. Employment in the manufacturing sector climbed 1.0 percent year-over-year to 5.3 million in June. The number of hours worked grew 8.3 percent to 700 million hours.

Eurozone trade surplus rose to a 6-month high in June as increase in exports exceeded imports growth, a report from Eurostat showed Monday. The trade surplus rose to a seasonally adjusted EUR 21.9 billion in June from EUR 21.3 billion in May. It was the highest level since December 2014, when surplus totaled EUR 22.5 billion. Nonetheless, it was below the expected surplus of EUR 23.1 billion.

German Chancellor Angela Merkel suggested in a television interview on Sunday that the third bailout for Greece is likely to succeed as the government is taking right steps. Merkel also expressed hope the International Monetary Fund will soon join the rescue.

Though the Greek government has made progress in implementing reforms, it remains to be seen if it will continue such performance, Merkel said in an interview to the German broadcaster ZDF.