Gold Ends Lower On Global Cues, Strong Dollar

(RTTNews) - Gold futures ended lower on Monday, as investors opted for the more riskier equity assets with most global stock markets in the U.S. and Europe trending higher on the Fed's decision not to raise interest rates for the time being. With the dollar gaining strength, gold futures found no support to push higher.

The U.S. Federal Reserve last Thursday decided to maintain its interest rates unchanged at near zero levels, on concerns over a global economic slowdown. However, indications were the Fed would likely opt for rate hike some time later this year, mostly in December.

In an interview with CNBC, St. Louis Fed President James Bullard said the central bank could raise rates next month but noted that many things can change from one meeting to the next.

The central bank's economic growth projections were lowered, and policy makers expressed concerns over the economic headwinds including problems in China.

There was no real indicators for gold with little economic news for direction. The only major news was existing home sales in the U.S. fell much more than expected in August, according to the National Association of Realtors Monday.

Gold for December delivery, the most actively traded contract, dropped $5.00 or 0.4 percent, to settle at $1,132.80 an ounce, on the Comex division of the New York Mercantile Exchange on Monday.

Gold for December delivery scaled an intraday high of $1, 139.40 and a low of $1,128.70 an ounce.

On Friday, gold prices for December delivery surged $20.80 or 1.9 percent, to settle at $1,137.80 an ounce, as the Federal Reserve decision not to raise interest rates at its monetary policy meet a day earlier.

For the week, gold prices gained about 3.1 percent.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 678.18 tons on Monday from its previous close.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 95.88 on Monday, up from its previous close of 94.23 in late North American trade on Friday. The dollar scaled a high of 95.98 intraday and a low of 95.04.

The euro trended lower against the dollar at 1.1192 on Monday, as compared to its previous close of 1.1303 in North American trade late Friday. The euro scaled a high of 1.1331 intraday and a low of 1.1182.

On the economic front, existing home sales in the U.S. fell much more than expected in August, a from the National Association of Realtors on Monday. NAR said existing home sales tumbled by 4.8 percent to a seasonally adjusted annual rate of 5.31 million in August from a downwardly revised 5.58 million in July. Economists expected sales to dip to a rate of 5.50 million from the 5.59 million originally reported for the previous month.

German producer prices declined at a faster-than-expected pace in August, figures from Destatis showed Monday. Producer prices fell 1.7 percent year-over-year in August, following a 1.3 percent decrease in the previous month. Economists had forecast a 1.6 percent drop for the month. Producer prices have been falling since August 2013.

China's service sector strengthened in the third quarter but the manufacturing sector continued to remain weak, the China Beige Book survey published by CBB International revealed Monday. Capital expenditure strengthened in the third quarter, the survey results based on responses from more than 2,100 firms showed today. Meanwhile, property market still remained weak.