Gold Rebounds To End Sharply Higher; Dollar Weakens

(RTTNews) - Gold futures ended sharply higher Monday, with investors seeking a bargain after the precious metal dropped about three percent last session and the dollar declining against a basket of major currencies. Prices also found support with analyst Deutsche Bank indicating price corrections for gold to have peaked.

Gold for August delivery, the most actively traded contract, jumped $22.20 or 1.8 percent to close at $1,234.90 an ounce Monday on the Comex division of the New York Mercantile Exchange.

Gold for August delivery scaled an intraday high of $1,237.40 and a low of $1,214.40 an ounce.

Last week, gold shed nearly 1 percent, dropping as much as three percent on Friday, as the dollar strengthened against a basket of major currencies after some upbeat jobs data from the U.S.

Holdings of SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, moved down to 961.99 tons from 964.69 tons.

The dollar index, which tracks the U.S. unit against six major currencies, traded at 84.26 on Monday, down from 84.45 late Friday in North American trade. The dollar scaled a high of 84.59 intraday and a low of 84.18.

The euro traded higher against the dollar at $1.2860 on Monday, as compared to $1.2810 late Friday in North America. The euro scaled a high of $1.2880 intraday and a low of $1.2812.

In economic news from the eurozone, German exports declined unexpectedly in May, while the growth in imports accelerated from the prior month, Destatis reported. Exports dropped 2.4 percent month-on-month, confounding expectations for a 0.1 percent rise. The decline in May revered 1.4 percent increase in April. Meanwhile, imports grew at a faster pace of 1.7 percent after rising 1.2 percent a month ago. It was forecast to remain flat in May.

Meanwhile, German industrial production declined more than expected in May due to notable decline in construction and energy output, the Federal Ministry of Economics and Technology said. Industrial output fell 1 percent in May from the previous month, the steepest since October 2012. Economists expected the production to fall 0.5 percent after rising 2 percent in April.

Eurozone investor confidence deteriorated in July after rising for two consecutive months, a survey by think-tank Sentix showed. The investor confidence index dropped to -12.6 in July from -11.6 in June, which was also worse-than the expected reading of -11.7.

Elsewhere in the eurozone, Greece reached an agreement with the European Union, the European Central Bank and the International Monetary Fund on economic reforms required for the next tranche of bailout fund, just hours ahead of the Eurogroup meeting Monday.

The troika agreed the macroeconomic outlook remains broadly in line with program projections, indicating prospects for a gradual return to growth in 2014 despite uncertain outlook. The eurozone ministers meeting in Brussels later in the day will formally decide on the next tranche of 8.1 billion euro aid to Greece. The funds are crucial for Athens to enable it repay bonds in August.